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That American CEOs earn significantly more than their counterparts in other countries has been widely documented. The current study reveals that the “US premium” might be more accurately labelled the “NYSE premium”. Focusing on the constituent firms of the S&P/TSX Composite Index (the largest Canadian firms of which almost half are cross-listed on US exchanges) and after controlling for firm size, industry, and other firm level characteristics, the average premium paid to CEOs of Canadian firms listed on the NYSE was approximately 100% while the CEOs of Canadian firms listed on the Nasdaq or AMEX received no premium, when compared to CEOs of firms listed only on the TSX. Over time, the average NYSE premium has decreased from 130% in 1998 to 90% in 2010, consistent with the convergence of CEO compensation to US standards. However, there was a Nasdaq premium of 48% in 1998 which had become a Nasdaq discount of 65% by 2010, coinciding with an mass exodus of Canadian firms from the Nasdaq.
This document has been peer reviewed.