publication . Report . Preprint . Article . 2015

The response of deferred executive compensation to changes in tax rates

Aspen Gorry; Kevin A. Hassett; R. Glenn Hubbard; Aparna Mathur;
Open Access
  • Published: 01 Sep 2015
  • Publisher: National Bureau of Economic Research
Abstract
Given the increasing use of stock options in executive compensation, we examine how taxes influence the choice of compensation and document that income deferral is an important margin of adjustment in response to tax rate changes. To account for this option in the empirical analysis, we explore deferral by estimating how executives’ choice of compensation between current and deferred income depends on changes in tax policy. Our empirical results suggest a significant impact of taxes on the composition of executive compensation.
Subjects
ACM Computing Classification System: ComputingMilieux_GENERALComputingMilieux_LEGALASPECTSOFCOMPUTING
free text keywords: jel:G30, jel:H24, jel:H32, jel:J33, Tax deferral, Tax policy, Executive compensation, Tax rate, Economics, State income tax, Deferred tax, Monetary economics, Tax reform, Indirect tax

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publication . Report . Preprint . Article . 2015

The response of deferred executive compensation to changes in tax rates

Aspen Gorry; Kevin A. Hassett; R. Glenn Hubbard; Aparna Mathur;