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FIRN Virtual Seminar Series - Prof David Reeb, NUS

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Working with the large FIRN member institutions we have developed a virtual seminar series where all FIRN members can participate. The seminars will be via zoom and will be about an hour long, comprising presentation followed by moderated Q&A.

In collaboration with the University of Queensland, FIRN invites you to a virtual seminar presented by Professor David Reeb, NUS

Title: The CEO-Employee Pay Gap

Houning Ma and David M Reeb

Abstract: We explore the impact of minimum wage hikes on the CEO-employee wage gap. Contrary to our expectations, we find that a one-dollar raise in the minimum wage reduces the CEO-employee pay ratio by 21% in minimum wage reliant firms. This reduction stems from an 8.3% decrease in CEO wages, coupled with a 12.7% increase in median employee salary. Further tests reveal that low CEO compensation is explained by recently promoted CEOs, franchising-structure, and low managerworker ratio (low manager reliance). Moreover, the CEO-employee pay gap narrows with competition and labor-intensity. Notably, the combined wages of all employees and executives in a minimum wage firm remains unchanged after a minimum wage hike. Overall, our results indicate that minimum wage hikes lead to lower within-firm pay gaps, suggesting that firms divide a fixed-wage budget between the CEO and employees.

All FIRN members are welcome to this event. Please register your interest and you will be sent an email the day before with the Zoom code and password.

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