The Anglo-Saxon premium in foreign CEO compensation

This paper examines whether foreign CEOs coming from Anglo-Saxon countries receive higher compensation than other foreign CEOs. The findings reveal a strongly positive association between Anglo-Saxon nationality and CEO compensation, including cash and non-cash components; and this finding is limited to a subset of firms that are headquartered in non-culturally and non-ethnically diverse counties. We interpret these findings as firms rewarding CEOs more for their perceived fit within the company given their shared cultural and social values, rather than Anglo-Saxon CEOs having higher rent-extracting capacities. Finally, the CEO's country of origin does not explain current and future firm financial performance.