An ill wind? Terrorist attacks and CEO compensation

Yunhao DAI, P. Raghavendra RAU, Aris STOURAITIS, Weiqiang TAN

Research output: Contribution to journalArticlespeer-review

81 Citations (Scopus)


Using multiple measures of attack proximity, we show that CEOs employed at firms located near terrorist attacks earn an average pay increase of 12% after the attack relative to CEOs at firms located far from attacks. CEOs at terrorist attack-proximate firms prefer cash-based compensation increases (e.g., salary and bonus) over equity-based compensation (e.g., options and stocks granted). The effect is causal and it is larger when the bargaining power of the CEO is high. Other executives and workers do not receive a terrorist attack premium. Copyright © 2019 Elsevier B.V. All rights reserved.
Original languageEnglish
Pages (from-to)379-398
JournalJournal of Financial Economics
Issue number2
Early online date14 Jun 2019
Publication statusPublished - Feb 2020


Dai, Y., Rau, P. R., Stouraitis, A., & Tan, W. (2020). An ill wind? Terrorist attacks and CEO compensation. Journal of Financial Economics, 135(2), 379-398. doi: 10.1016/j.jfineco.2019.06.005


  • Terrorist attacks
  • Executive compensation
  • Compensation structure
  • CEO labor market
  • Nonmonetary compensation


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