Andrea Eisfeldt, University of California-Los Angeles
Antonio Falato, Federal Reserve Board of Governors
Dongryeol Lee, University of California-Los Angeles
Mindy Xiaolan, University of Texas-Austin
Abstract: Equity pay has become increasingly common over the last several decades but the differences in the level of equity pay across firms are very large. This study documents the inequality in equity pay across firms and describes the drivers of firm-level differences in equity pay policies. We show that firm-level equity pay is very persistent, and a large fraction of the differences across firms in equity pay comes from differences in initial values. Some of the differences in initial values can be attributed to differences across firms' financial constraints and to substantial peer effects. We show that high equity pay firms manage equity pay most actively, in particular counteracting the effects of stock price gains and losses. High-equity pay firms tend to be younger, and to experience subsequently higher employment growth. We also compare equity pay beyond the C-Suite to CEO equity pay and show that CEOs' equity pay is much less persistent, and is actually lower at younger firms and firms that experience higher employment growth. We argue that equity pay is both a compensation and a capital structure decision, and draw out these parallels.
Abstract: A large literature shows that bank access increases household well-being by increasing household access to credit. However, using a regression discontinuity design based on a major bank expansion program in India, we show that bank access increases household financial well-being by increasing borrowing by firms, not households. Following the expansion in bank access, firms borrow more, earn higher revenues, employ more workers, and household wage earnings rise, leading to increases in household consumption expenditures, savings, and investments. Heterogeneity analyses show that bank expansion predominantly spurs borrowing by urban, manufacturing and service sector firms, with limited impact on rural, agricultural firms.
J. Anthony Cookson, University of Colorado-Boulder
Emily Gallagher, University of Colorado-Boulder
Philip Mulder, University of Wisconsin-Madison
Abstract: Crowdfunding is an increasingly popular way to raise emergency funding after disasters. However, for victims of a major Colorado wildfire, we find that crowdfunding raised more support for wealthier beneficiaries rather than helping the most vulnerable. Specifically, beneficiaries with income above $150,000 receive 28% more support on GoFundMe than beneficiaries with income below $75,000. High-income households are also 14 percentage points more likely to have a crowdfunding campaign at all. These findings hold conditional on the amount of property value destroyed by the fire. The regressive allocation of disaster crowdfunding relates to several network advantages possessed by high-income households, including more connections outside the disaster area. Our findings highlight substantial disparities in social network insurance, which, as we show, likely exacerbate income inequalities in the recovery process.
Discussant: Francesco D'Acunto, Georgetown University
