Skilled Labor Risk and Compensation Policies
نویسندگان
چکیده
We measure U.S. publicly traded companies’ exposures to skilled labor risk, i.e., the potential failure in attracting and retaining skilled labor, by the intensity of their discussions on this issue in their 10-K filings. We show that this measure effectively captures firm risk due to the mobility of skilled labor. We find that skilled labor risk is an important determinant of corporate compensation policy. Firms facing higher skilled labor risk ex ante offer a higher level of compensation to skilled labor and also structure the compensation more towards equity-based incentive pay, consistent with the theoretical predictions. JEL classification: G30, G32, G34, H20, J20, J24, J40, J41
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