We examine the extent to which deferred vesting of stock and option grants (deferred pay) helps firms retain executives. To the extent an executive forfeits all deferred pay if they leave the firm, deferred vesting will increase the cost (to the executive) of an early exit. The impact of deferred pay on executive retention, a key ingredient for firms to create shareholder value is hence an important empirical issue. Using pay duration proposed in Gopalan et al. (2014) as a measure of the extent of deferred equity, we find that CEOs and non-CEO executives with longer pay duration are less likely to leave the firm voluntarily. The talent retention role of deferred pay is mitigated by performance-vesting provisions and signing bonuses offered by industry peers. Moreover, we also find that voluntary turnover is less sensitive to pay duration for executives who are perceived to be more talented and have more firm-specific skills. Overall, our study highlights a strong link between compensation design and turnover of top executives. It suggests that firms take into account the need for retaining managerial talent in designing executive compensation.

中文翻译：

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递延股权薪酬在留住管理人才中的作用*

我们研究了股票和期权授予的递延归属（递延薪酬）在多大程度上有助于公司留住高管。如果高管离开公司，他们将丧失所有递延薪酬，递延归属将增加提前退出的成本（对高管而言）。延期支付对高管保留的影响是公司创造股东价值的关键因素，因此是一个重要的实证问题。使用 Gopalan 等人提出的薪酬期限。(2014) 作为衡量递延股权程度的指标，我们发现薪酬期限较长的 CEO 和非 CEO 高管自愿离开公司的可能性较小。绩效归属条款和行业同行提供的签约奖金减轻了延迟薪酬的人才保留作用。而且，我们还发现，对于那些被认为更有才华和拥有更多公司特定技能的高管来说，自愿离职对薪酬期限的敏感性较低。总体而言，我们的研究强调了薪酬设计与高管人员流动之间的密切联系。它表明公司在设计高管薪酬时会考虑留住管理人才的需要。