Quotation Bornemann, Tobias, Jacob, Martin, Sailer, Mariana. 2019. Do Corporate Taxes Affect Executive Compensation?




The limitation of executive compensation has been a matter of public and policy debate for at least 20 years. We examine a first-time regulatory action where the deductibility of the total value of executive compensation is limited and unavoidable. We find that, rather than reduce remuneration, companies reduce precautionary savings, thereby increasing risk. This suggests that firms pass on the burden of increased taxes to shareholders. Our results shed light on the effects of reforms similar to the U.S. Tax Cuts and Jobs Act of 2017 and contribute to prior findings that argue for proactive regulation to limit executive compensation.


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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Working/discussion paper, preprint
Language English
Title Do Corporate Taxes Affect Executive Compensation?
Year 2019
URL https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3403486


Bornemann, Tobias (Details)
Sailer, Mariana (Details)
Jacob, Martin (WHU - Otto Beisheim School of Management, Germany)
Management Accounting and Control Group AB (Details)
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