"Corporate Lobbying and CEO Pay"
Hollis A. Skaife, Professor in the Graduate School of Management at the University of California - Davis
This study explores the relation between lobbying and CEO compensation. We show that CEOs of firms engaged in lobbying earn significantly more compensation compared to CEOs in non-lobbying firms, after controlling for standard economic determinants of
pay. The relation between lobbying and CEO pay increases with the intensity of firms’ lobbying, and the results of a difference-in- difference analysis demonstrate significant increases in CEO pay after firms’ initial engagement in lobbying. Although lobbying ispositively associated with future sales growth, we find no evidence that lobbying culminates in abnormal shareholder wealth creation. Based on our findings, we conclude that firms incentivize CEOs in the short term to engage in corporate lobbying via pay but that corporate lobbying is not associated with abnormal long-term gains for shareholders.
Hollis A. Skaife is a Professor in the Graduate School of Management at the University of California - Davis. Hollis obtained her Ph.D. from the University of Iowa in 1997 and was the David Lesar Professor of Business at the University of Wisconsin-Madison before joining the faculty of Davis in 2013. Her research addresses international financial reporting topics including the role of International Financial Reporting Standards (IFRS), internal control, and auditing in the development of high quality financial information. Her research is published in many journals including The Accounting Review, Journal of Accounting Research, Journal of Accounting and Economics, Journal of Business Ethics, Journal of International Accounting Research, and Journal of Accounting and Public Policy, and has had public Policy implications as evidenced by its citation in Congressional hearings, GAO reports, PCAOB reports, and the financial press. Hollis has taught various accounting courses at the undergraduate, masters, and Ph.D. level and currently teaches financial accounting in the Masters of Professional Accounting and MBA programs at UCD. She was a member of the IFRS Advisory Council from 2009 – 2011, and currently serves on the editorial boards of several journals.
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