American Economic Journal: Economic Policy
no. 3, August 2023
I analyze the effect of two corporate tax breaks, bonus depreciation and the Domestic Production Activities Deduction (DPAD), on executive compensation in publicly traded US firms. I find both tax breaks significantly increase executive compensation. For every dollar a firm benefits from the tax breaks, compensation of the firm's top five highest-paid executives increases by $0.17 to $0.25. The tax breaks increase compensation primarily in firms with weaker governance structures, suggesting the compensation response is driven by executive rent extraction.
"Corporate Tax Breaks and Executive Compensation."
American Economic Journal: Economic Policy,
Firm Behavior: Empirical Analysis
Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
Business Taxes and Subsidies including sales and value-added (VAT)
Personnel Management; Executives; Executive Compensation
Personnel Economics: Compensation and Compensation Methods and Their Effects