Distributional differences in the time horizon of executive compensation

Abstract The aim of executive compensation plans is to incentivize executives maximize long-term firm value. Past research shows that executives’ pay determined by short-term stock performance a substantial degree. This paper tests for distributional differences in the time horizon performance–pay relation, controlling executive-firm fixed effects quantile regression framework. I identify and industry using filter estimate relation method moments–quantile (Machado Santos Silva J Econ 213:145–173, 2019). find right tail conditional total distribution has more long-term-oriented than left tail. By contrast, accumulated wealth short-term-oriented Results show asymmetry relations may exist, but do not vary across distribution.