Code

I have written three STATA programs that compute the subjective (or certainty equivalent) value of executive compensation and components thereof. The subjective value is computed according to the model of Ingersoll, Jonathan E., 2006, “The subjective and objective evaluation of incentive stock options”, Journal of Business, vol. 79, no. 2, pp. 453-488. The STATA programs below create a variable containing the subjective value of total executive compensation (1st file), the subjective value of option compensation (2nd file) and the subjective value of restricted stock (3rd file).

The programs were used for an empirical application in the paper “The Executive Turnover Risk Premium”, Journal of Finance, vol. 69, no. 4, pp. 1529-1563 (with Alexander Wagner).

A detailed description of the code is given in the preamble at the top of the code.