Abstract
Understanding executive compensation and its effects helps design better organizations. Research on this area is thus of paramount importance. For large US companies, the ExecuComp database offers access to standardized and comprehensive executive compensation data. Hence, research on executive compensation has strongly focused on US companies. It is not clear that research results based on US data apply to other countries due to differences in corporate governance and culture. We have built up a database that is similar to ExecuComp for Germany, which is by far the largest economy in Europe. This database includes companies from the two largest German stock indices DAX and MDAX. We make these data available for academic research. We describe the data and we provide important results to outline the opportunities that our database offers. We find that only some of the empirical results for US companies such as the association between company size and pay level generalize to German companies while others such as compensation structure and the vertical pay inequality provide opportunities for further investigation.
Highlights
How could bank executives walk away with millions after taxpayers bailed out their companies during the financial crisis? Why do executives earn a multiple of the average employee’s wage? Are female executives paid less than their male peers? Such questions about the compensation of executives continue to be an issue of academic and public debate
The empirical literature on executive compensation focuses on US companies (Jensen and Murphy 1990; Hall and Liebman 1998) or companies governed by a one-tier board system (Conyon and Murphy 2000; Conyon et al 2011)
Edmans et al (2017) finds some evidence that CEO compensation levels are negatively associated with CEO age while we provide strong evidence that executive compensation levels are positively associated with executive age in Germany
Summary
How could bank executives walk away with millions after taxpayers bailed out their companies during the financial crisis? Why do executives earn a multiple of the average employee’s wage? Are female executives paid less than their male peers? Such questions about the compensation of executives continue to be an issue of academic and public debate. Families or endowments are frequently majority shareholders, leading to greater long-term commitment and less opportunity for hostile take-overs These characteristics render Germany an interesting economy for further research on executive compensation. A main reason for the focus of empirical studies on the US is that scholars can access and collect data on executive compensation of US companies via ExecuComp (Edmans and Gabaix 2016). The database provides standardized data on executive compensation for S&P 1500 companies from 1992 to the present, and it includes items such as base salary, bonus and stock options, as well as some data on companies’ financials. The database should enable researchers to compare compensation levels and compensation structures across companies, years, and countries. Our database provides individual compensation information on all executives of the 80 largest companies listed in Germany.
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