We present a model of the market for executives that is consistent with many empirical facts about executive compensation, pay inequality, turnover, and mobility across firms. A novel feature of our model is the existence of two different equilibria in executive markets. This feature fits well with the existing evidence that executive labor markets have become structurally different in more recent times, as the empirical literature suggests. The model allows us to provide a unified narrative of the evolution of executive labor markets.
Link to paper: http://www.eesp.fgv.br/sites/eesp.fgv.br/files/file/Daniel_Ferreira.pdf