Money Isn't Everything: Compensation Of Locally Educated Executives
Executive compensation, Geographic preference discount, Managerial incentives
Journal of Corporate Finance
We identify the location of an executive's undergraduate university education as a proxy for their geographic preference. Executives whose university education took place near a firm's headquarters are paid 4.40% to 11.01% less than their peers, suggesting the transparency of university education allows firms to use the location of their headquarters as a form of intangible compensation. This geographic preference discount persists across all levels of the C-Suite, corporate governance quality, time periods, and after controlling for opaque measures of where the executive grew up. Our study shows the location of an executive's undergraduate university is a consequential component of his or her geographic preference, and that such preference has meaningful implications for his or her compensation.
Department of Finance
Original Publication Date
DOI of published version
Bick, Patty and Flugum, Ryan, "Money Isn't Everything: Compensation Of Locally Educated Executives" (2022). Faculty Publications. 5306.