Document Type

Journal Article

Department/Unit

Department of Finance and Decision Sciences

Title

An Ill Wind? Terrorist Attacks and CEO Compensation

Language

English

Abstract

Using multiple measures of attack proximity, we show that CEOs employed at firms located near terrorist attacks earn an average pay increase of 12% after the attack relative to CEOs at firms located far from attacks. CEOs at terrorist attack-proximate firms prefer cash-based compensation increases (e.g., salary and bonus) over equity-based compensation (e.g., options and stocks granted). The effect is causal and it is larger when the bargaining power of the CEO is high. Other executives and workers do not receive a terrorist attack premium.

Keywords

Terrorist attacks, Executive compensation, Compensation structure, CEO labor market

Publication Date

2018

Source Publication Title

Journal of Financial Economics

Publisher

Elsevier

DOI

10.2139/ssrn.3032283

Link to Publisher's Edition

https://doi.org/10.2139/ssrn.3032283

ISSN (print)

0304405X

ISSN (electronic)

18792774

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