Journal of Corporate Finance Vol. 74 2022
Money isn't everything: Compensation of locally educated executives
Abstract
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.
- DOI
- 10.1016/j.jcorpfin.2022.102212
- Volume
- 74
- Pages
- 102212
- Language
- en
- Sources
- openalex crossref bibtex:phds-export.bib