Doctoral student researching comparative political economy at Central European University, Budapest.

Research interests: comparative/international political economy, parties and economic policy making, economic and political inequality, quantitative research methods

Other research interests: history of economic policy making/economic governance

Title and outline of thesis:

The Politics of Upward (Re-?) Distribution: Political Causes and Consequences of CEO Pay across Advanced Democracies


Since the 1970s, top income concentrations escalated, and generous bonus rewards appeared more frequently, though, this trend was more widespread in some democracies more than others. Why did some advanced democracies experience growth in top income share more so than others? The thesis disentangles the political causes and consequences of CEO pay. In doing so, it goes beyond current research, frequently using top income shares, by forming new political hypotheses tested with CEO pay data. The thesis exhibits three main findings and contributes to the political science debate on the politics of top income earnings, economic inequality, and highly salient CEO compensations. First, across 17 OECD countries, controlling for firm size and economic variables, traditional re-distributional tools such as the power of labour and progressive taxation affects levels of top executive compensation. The effect varies across pay components and firm size. The analyses also show that traditional re-distributional tools exert a stronger moderation effect compared new corporate governance regulations. Secondly, while there are evidence that left parties moderate pre-tax top income distribution, it lacks an encompassing explanation on the effect of over time regulatory changes such as financialization and market liberalization on pre-tax top income distribution. Using Swedish micro and macro dataset on high income earners, I found that left governments acquire a conditional positive effect on pre-tax income at the top. Third, while top managers supporting Conservatives in the UK donate more in values, during the sample period, the responsiveness to donate with respect to top executive compensation is higher for CEOs supporting Labour. The sensitivity is particularly high with respect to the value of stock options and restricted stocks granted. The analyses display further that is the increase in the value of equity based pay for CEOs supporting Labour, which generates increasing return, causing inequality in political contribution. The findings in the thesis exert that variations in top executive compensations across advanced economies are connected to political institutions. And further, in the age of high top income concentrations and generous compensation schemes, political party preferences and strategies are considerably driven by political engagement of wealthy elites, suggesting declining relevance of mass politics relative to special interests in 21st century democracies. The findings bring forth several implications. An important one is that regulators have to acknowledge the significant connection between political and democratic institutions, and compensation of top managers. I have also discussed, how my research can pave the way for further studies on the politics of high earnings.

Keywords: top executive compensation, redistribution, economic inequality, top 1 %, varieties of capitalism, government partisanship, political inequality




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