Table 1

No evidence that the cap on deductibility has affected CEO compensation: Various specifications (using Compustat's TDC1)

(1) (2) (3) (4) (5) (6) (7) (8)
VARIABLES
Post-2012 health insurance company -1246 -234.9 556.8 938.2 1388 1443 1423 1243
(1142) (1004) (741.6) (667.3) (1057) (989.8) (1014) (1075)
Net income 0.0886 -4.082*** -4.789** -1.071
(0.0668) (0.372) (1.964) (3.012)
Sales 0.000335 -0.815*** -0.808*** -0.810
(0.00850) (0.0694) (0.0672) (0.947)
Market value 0.0255** 0.0636*** 0.0693*** 0.104
(0.0108) (0.0125) (0.0205) (0.0851)
Difference in net income -0.0860* -0.0883** -0.0818* -0.0720
(0.0467) (0.0447) (0.0446) (0.0443)
Difference in sales 0.0357** 0.0385** 0.0366** 0.0291*
(0.016) (0.0157) (0.0158) (0.0155)
Difference in market value -0.00122 -0.000602 -0.00117 0.00466
(0.00993) (0.0107) (0.0108) (0.0109)
Health insurance dummy 3318**
(1681)
Net income (t=-1) 0.0664 -22.14***
(0.0582) (0.608)
Sales (t=-1) -0.00512 0.0202
(0.00888) (0.0820)
Market value (t=-1) 0.0184* -0.00279
(0.00960) (0.00535)
Difference in net income (t=-1) -0.0358 -0.0152
(0.0257) (0.0298)
Difference in sales (t=-1) 0.0329* 0.0381*
(0.0181) (0.0203)
Difference in market value (t=-1) 0.0207* 0.0236**
(0.0106) (0.0103)
Sales (t=-2) -0.000981
(0.00989)
Market value (t=-2) 0.00656
(0.0103)
Difference in net income (t=-2) -0.0110
(0.0246)
Difference in sales (t=-2) 0.000513
(0.0120)
Difference in market value (t=-2) 0.0229**
(0.0100)
Retirement year dummy -118.4 -610.9
(315.1) (406.1)
Retirement year dummy (t=-1) -1288*** -1405***
(411.6) (414.4)
Constant 9829*** 7413*** 7498*** 7655*** 17975*** 25113*** 18374*** 14549
(850.9) (119.0) (111.0) (110.6) (768.2) (365.4) (1421) (10887)
Observations 4183 3408 2965 2597 3408 2965 3408 3408
Number of firms 555 411 381 349 411 381 411 411
R-squared, within 0.0232 0.0225 0.0202 0.00642 0.164 0.145 0.167 0.175
R-squared, between 0.00208 0.366 0.324 0.297 0.448 0.371 0.448 0.450
R-squared, overall 0.00681 0.228 0.228 0.228 0.342 0.338 0.344 0.350

Notes: * p<.05; ** p<.01; *** p<.001. Model 1 provides a baseline for comparison and only includes dummy variables to designate the treatment group, all health insurers, and years. Model 2 does not include interactions or lags. Model 3 does not include interactions, and all variables are lagged by one year. Model 4 does not include interactions, and all variables are lagged by two years. Model 5 includes industry-specific interactions, but no lags. Model 6 includes industry-specific interactions, and all variables are lagged by one year. Model 7 includes industry-specific interactions, as well as a retirement dummy. Model 8 includes industry-specific interactions, as well as retirement and year dummies. As compared to specifications used in Does tax deductibility affect CEO pay? The case of the health insurance industry, these results use Compustat's TDC1 variable as a dependent variable, instead of TOTAL_ALT2.

Source: Authors' analysis of data from Compustat's ExecuComp database.

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