The relative CEO to employee pay for luck

In this study, we fill the void in the literature by examining relative CEO to employee pay for luck and pay asymmetry phenomena over 72 years from 1949 to 2020. We find that CEO pay for luck and the asymmetric benchmarking of the pay exist for CEOs as well as median employees. However, CEOs have a more robust pay for luck and a more pronounced pay asymmetry than median employees. Furthermore, we find that the corporate pay-related regulations implemented in the 2000s have achieved their intended goal of mitigating pay inequity between CEOs and median employees. It lowers the degree of CEO pay for luck and asymmetry compared to median employees. Our findings shed new insights on CEO and employee pay for non-performance to academia, regulators, and shareholders.