Economics Department


Date of this Version



National Tax Journal, December 2013, 66 (4), 913–938


Copyright (c) 2013 Seth H. Giertz and Jacob A. Mortenson.


We examine income trends for top executives, focusing on the years 2000 to 2010, with special emphasis on the period surrounding the Great Recession. First, we merge Execucomp executive compensation records with IRS tax records. We compare incomes from our Execucomp sample to top incomes reported by Piketty and Saez (2003). We disaggregate executive income trends by industry, showing which industries are driving the divergence in top executive incomes. We compare our results to findings from Bakija, Cole, and Heim (2010) and Kaplan and Rauh (2010), who examine trends in top incomes for broad occupation and industry categories for years prior to the Great Recession. We also decompose these income trends by income source to see which components are driving the observed changes. We find that stock options are by far the most volatile component of executive pay. Options are the key driver of both short-term swings and longer-term trends in top executive pay. However, stock awards are also a large and growing component. We find much greater variation in income across years than across industries. Executive incomes are most volatile at the very top of income distribution. In general, trends for top executives in fi nance and non-finance industries are quite similar; however; for those above the 99.9th percentile of the income distribution, the decline in income from 2006 to 2009 was much more pronounced for executives in finance.