Abstract
We examine the compensation of ethnic minority executives in listed US firms. The total pay of African American executives is 9 percent lower than that earned by Caucasians. This is due to lower base salary, lower bonus, and lower restricted stock grants. The lower bonus is due to a lower sensitivity to above average firm performance. African Americans also earn significantly less on the exercise of stock options, increasing the pay gap to 17 percent for total ex-post pay. In contrast to African Americans, the compensation of Hispanic and Asian executives is comparable to Caucasians.