One-third of S&P 1500 CEOs reduced their base salary in 2020 as the onset of the coronavirus pandemic caused widespread economic disruption. These pay cuts were often accompanied by press releases that emphasized notions of CEOs “leading from the front,” “being all in this together,” and “sharing the pain” of the pandemic with employees. In a new article, we document that a more complex adjustment to CEO pay occurred during this time. In a controlled analysis of executive compensation, we find that, while many CEO base salaries declined during 2020, the total compensation for all CEOs increased by nearly … Read more
Following news reports about executives selling shares in their corporations to avoid losses due to the pandemic, we take a closer look at insider trades and find that net insider purchases have been positive in February and March, revealing corporate optimism, not pessimism. Our findings are a reminder that not all burning questions about the impact of the pandemic can or should be answered right now.