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Kevin Murphy

Kevin Murphy

Professor of Business, Economics and Law

Last Updated: Wednesday, December 7, 2011

Telephone: (213) 740-6553
Fax: (213) 740-6465
699 Exposition Blvd. Los Angeles, CA 90089-0074 USA Room: HOH812

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Professor Murphy is a nationally known expert on executive compensation. He teaches Corporate Finance and Compensation, Incentives and Governance in the USC Marshall School of Business, where he was named chair of the department of finance and business economics and holds the E. Morgan Stanley Chair in Business Administration.

Professor Murphy helped the U.S. Securities and Exchange Commission formulate disclosure rules for top management pay. His study examining the salary trends of top executives, published in 2000, set a benchmark in finance research. He has provided commentary on corporate pay reform to The New York Times, Los Angeles Times and Boston Globe, among other media.

Professor Murphy has written several Harvard teaching cases and is an associate editor of the Journal of Financial Economics, the Journal of Accounting and Economics, Managerial and Decision Economics, and the Journal of Corporate Finance. Prior to joining USC in 1995, he was on the faculty at the Harvard Business School and the University of Rochester's Simon School of Business.

A selection of papers can be downloaded from Kevin Murphy's Author Page at the Social Science Research Network (SSRN) Electronic Library or from Kevin Murphy's Personal Home Page.


  • The Economics of Executive Compensation (co-edited with Kevin F. Hallock) (Edward Elgar Publishing, 1999).

Contributions to Books

  • “Stock-Based Compensation” (with Martin J. Conyon). In Convergence and Diversity in Corporate Governance Regimes and Capital Markets (Joseph McCahery with others, eds.) (Oxford University Press, 2002).
  • "Executive Compensation." In Handbook of Labor Economics (Orley Ashenfelter and David Card, eds.) (1999).
  • "Performance Measurement and Appraisal: Motivating Managers to Identify and Reward Performance." In Performance Measurement, Evaluation, and Incentives (William J. Bruns, Jr. ed.) (Harvard Business School Press, 1992). [Reprinted in 20 Employment Relations Today (Spring 1993).]


  • "CEO Pay and Appointments: A Market-Based Explanation for Recent Trends" (with Jan Zabojnik). 94 American Economic Review 192 (2004).
  • "The Effect of Industrial Diversity on State Unemployment Rate and Per Capita Income" (with Oded Izraeli). 37 Annals of Regional Science 1 (2003).
  • "Explaining Change in the Natural Rate of Unemployment: A Regional Approach" (with James E. Payne). 43 Quarterly Review of Economics and Finance 345 (2003).
  • "A General Equilibrium Model of the Payroll Tax Incidence of State Unemployment Insurance Systems." 31 Public Finance Review 44 (2003).
  • "Stock-Based Pay in New Economy Firms." 34 Journal of Accounting and Economics 129 (2003).
  • "The Trouble with Stock Options" (with Brian J. Hall). 17 Journal of Economic Perspectives 49 (2003).
  • "Explaining Executive Compensations: Managerial Power versus the Perceived Cost of Stock Options." 69 The University of Chicago Law Review 847 (2002).
  • "Relational Contracts and the Theory of the Firm" (with others). 117 Quarterly Journal of Economics 39 (2002).
  • "Stock Options for Undiversified Executives" (with Brian J. Hall). 33 Journal of Accounting and Economics 2 (2002).
  • "Bringing the Market Inside the Firm?" (with George Baker and Robert Gibbons). American Economic Review (May 2001).
  • "Performance Standards in Incentive Contracts." 30 Journal of Accounting and Economics 3 (December 2000).
  • "The Prince and the Pauper? CEO Pay in the U.S. and U.K." (with Martin J. Conyon). Economic Journal (November 2000).
  • "Optimal Exercise Prices for Executive Stock Options" (with Brian J. Hall). American Economic Review 209 (May 2000).
  • "Informal Authority in Organizations" (with George Baker and Robert Gibbons). 15 Journal of Law, Economics, and Organizations (1999).
  • "Executive Compensation and the Modern Industrial Revolution." 15 International Journal of Industrial Organization (July 1997).
  • "Reporting Choice and the 1992 Proxy Disclosure Rules." 11 Journal of Accounting, Auditing, and Finance (Summer 1996).
  • "Incentives, Downsizing, and Value Creation at General Dynamics" (with Jay Dial). 37 Journal of Financial Economics (March 1995).
  • "Subjective Performance Measures in Optimal Incentive Contracts" (with George P. Baker and Robert Gibbons). Quarterly Journal of Economics (1994).
  • "Financial Performance Surrounding CEO Turnover" (with Jerold L. Zimmerman). 16 Journal of Accounting and Economics (1993). [Reprinted in The Economics of Executive Compensation (K. J. Murphy and K. Hallock, eds.) (Edward Elgar Publishing, 1999).]
  • "Does Executive Compensation Affect Investment?" (with Robert Gibbons). 5 Journal of Applied Corporate Finance (Summer 1992).
  • "Optimal Incentive Contracts in the Presence of Career Concerns: Theory and Evidence" (with Robert Gibbons). 100 Journal of Political Economy (June 1992). [Reprinted in The Economics of Executive Compensation (K. J. Murphy and K. Hallock, eds.) (Edward Elgar Publishing, 1999).]
  • "CEO Incentives: It's Not How Much You Pay, But How" (with Michael C. Jensen). Harvard Business Review (May/June 1990). [Reprinted in 3 Journal of Applied Corporate Finance (Fall 1990).]
  • "Performance Pay and Top-Management Incentives" (with Michael C. Jensen). 98 Journal of Political Economy April 1990). [Reprinted in The Economics of Executive Compensation (K. J. Murphy and K. Hallock, eds.) ( Edward Elgar Publishing, 1999) and The Economics of Executive Compensation (K. J. Murphy and K. Hallock, eds.) (Edward Elgar Publishing, 1999).]
  • "Relative Performance Evaluation for Chief Executive Officers" (with Robert Gibbons). 43 Industrial and Labor Relations Review (February 1990). [Reprinted in Do Compensation Policies Matter? (Ronald G. Ehrenberg ed.) (ILR Press-Cornell, 1990)
  • "Compensation and Incentives: Practice vs. Theory" (with George P. Baker and Michael C. Jensen). 43 Journal of Finance (July 1988). [Reprinted in Corporate Governance ( K. Keasey, S. Thompson, and M. Wright, eds.) (Edward Elgar Publishing, 1999).]
  • "Incentives, Learning, and Compensation: A Theoretical and Empirical Investigation of Managerial Labor Contracts." 17 Rand Journal of Economics (Spring 1986). [Reprinted in The Economics of Executive Compensation (Edward Elgar Publishing, 1999).]
  • "Top Executives Are Worth Every Nickel They Get." 64 Harvard Business Review (March/April 1986). [Reprinted in Taking Sides, 2nd edition (Lisa H. Newton and Maureen M. Ford, eds.) (Dushkin Publishing Group, Inc., 1992).]
  • "Corporate Performance and Managerial Remuneration: An Empirical Investigation." 7 Journal of Accounting and Economics (April 1985). [Reprinted in Labor Economics (O. Ashenfelter and K. F. Hallock, eds.) and Corporate Governance (K. Keasey, S. Thompson, and M. Wright, eds.) (Edward Elgar Publishing, 1999). and The Economics of Executive Compensation (K. J. Murphy and K. Hallock, eds.) (iEdward Elgar Publishing, 1999).]


Los Angeles Times
April 26, 2017
Re: Edward Kleinbard

Edward Kleinbard was cited about the limited economic benefits for Americans when tax breaks encourage companies to repatriate foreign income. After the tax holiday, U.S. corporations even stepped up their sequestering of profits abroad, figuring that sooner or later a new administration would offer them yet another break — as Trump is proposing. That hoard of what Kleinbard calls “stateless income” now tops $2 trillion.


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