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Societal Equality Sentiment and Executive Compensation

Onal, Bunyamin; Petmezas, Dimitris; Xiong, Nan


Bunyamin Onal

Dr Nan Xiong
Assistant Professor in Finance


Using elections that reveal changes in countries’ leniency on the left-right political spectrum, we examine whether societal sentiment regarding income inequality affects executive compensation. We find that elections that bring left-leaning (pro-equality) political leaders to power are associated with significantly lower CEO pay and this impact begins in the year of such elections, not before. We further show that a rise in pro-equality sentiment restrains powerful CEOs from extracting rents. However, such sentiment also imposes value-damaging limits on incentives of senior executives in a given firm or industry. Our results are robust to a host of alternative measures and specifications.


Onal, B., Petmezas, D., & Xiong, N. (2022). Societal Equality Sentiment and Executive Compensation. Journal of Corporate Finance, 77, Article 102314.

Journal Article Type Article
Acceptance Date Oct 21, 2022
Online Publication Date Nov 1, 2022
Publication Date 2022-12
Deposit Date Oct 24, 2022
Publicly Available Date May 2, 2024
Journal Journal of Corporate Finance
Print ISSN 0929-1199
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 77
Article Number 102314
Public URL


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