We examine the role of accounting in CEO equity compensation design. For a sample ExecuComp firms 1995–2001, we find that financial reporting concerns are positively related to stock option use and total compensation, negatively restricted stock. confirm our findings by examining changes begin expensing options 2002 or 2003. these reduce their increase after starting expense but exhibit no decrease compensation. Taken together, analyses suggest favorable treatment for led higher lower than...

ABSTRACT We examine institutional investors' preferences for corporate governance mechanisms. find little evidence of an association between total ownership and However, using revealed preferences, we identify a small group “governance-sensitive” institutions that exhibit persistent associations their levels firms' also firms with high level by sensitive to shareholder rights have significant future improvements in rights, consistent activism. Further, factors describing the characteristics...

Abstract Using a large sample of executives in S&P 1500 firms over 1996–2010, we document significant salary and total compensation gaps between female male explore two possible explanations for the gaps. We find support greater risk aversion as one contributing factor. Female hold significantly lower equity incentives demand larger premiums bearing given level risk. These results suggest that females’ contributes to observed pay levels through its effect on ex ante structures. also...

In this paper, we investigate the timeliness of and stock price reaction to a sample Form 8-K reports filed in 1993 with Securities Exchange Commission (SEC). Under current SEC regulations, must be within 5 15 days after occurrence certain events, such as bankruptcy filing or an auditor change, well any material development that registrant believes is relevant its investors. The SEC's presumption investors; particular, report plays critical role periodic reporting system, which intended...

Abstract: We examine the implications of regulatory intervention in pay‐setting, by studying whether executive compensation restrictions associated with Troubled Asset Relief Program (TARP) influence banks’ participation program. find that banks more likely to be impacted are less participate TARP. Among accepting funds, we likelihood repaying before end 2009 is positively related CEO incentive compensation. greater subsequent turnover and lower pay increases consistent concerns about talent...

Using a sample of large UK firms from 2002 - 2006, we examine the role that shareholder remuneration votes play in executive compensation design. In particular, investigate what aspects CEO shareholders vote against and whether corporate boards, turn, respond to negative by making changes those pay elements. Prior research investigates US voluntarily seek ratification equity plans thus may suffer self-selection bias. Conversely, provides an ideal setting because have been required for all...

We examine institutional investors’ preferences for corporate governance mechanisms. find little evidence of an association between total ownership and However, using revealed preferences, we identify a small group “governance-sensitive” institutions that exhibit persistent associations their levels firms’ also firms with high level by sensitive to shareholder rights have significant future improvements in rights, consistent activism. Further, factors describing the characteristics...

We examine whether companies select compensation peer groups opportunistically to increase CEO pay. Using 608 firms from the S&P 1500, 2,154 identified their proxy statements, and a pool of potential peers representing firm's labor market in which it competes for talent, we find limited evidence that choose opportunistically. Although bigger better performing relative other peers, only size has any power explaining On hand, inconsistent with opportunism, sample are more similar them on...

ABSTRACT We examine whether firms benchmark annual equity grants to compensation peers and meeting the participation constraint is a motive. Studying CEO over period of 2006–2016 disclosed by firm, we find that these significantly determine firm's grants. no evidence relation between its peers' an indirect outcome peer total levels. In contrast, show are more likely meet grant levels when labor market competitive losing key personnel risk factor. also turnover receives lower than peers....

We study whether and how the United States' CEO pay ratio disclosure rule affected employee satisfaction. Using a staggered difference-in-differences design, we find that satisfaction increases after ratios were first disclosed. evidence mechanism behind observed increase in is change workers' reference wages. Specifically, there stronger effect on for employees who had less information available to them through other sources prior disclosures. Our results are among document positive of...

Using proxy statement data describing the terms of compensation contracts, we examine how overlapping membership between and audit committees influences use earnings metrics in compensation. Although research predicts that such overlap could either increase or decrease reliance on earnings, find firms with directors rely less earnings-based performance measures incentive contracts without altering overall level performance-contingent cash bonuses. In addition, provide evidence substitute...

ABSTRACT We study whether executives receive pay premiums for the uncertainty of their match with a new firm. Using changes in executive-firm matches from Execucomp, we document that significant attraction when they move to firms. These vary proxies capture potential sources about quality match, and are incremental managerial talent, generalist ability, industry turnover risk, additional costs incurred by employer attract executive firm, such as payments forfeited equity relocation costs....

Despite claims that CEO compensation contracts are increasingly complex, little is known about the extent to which they are, what drives complexity, and its implications. We develop a new measure of contract complexity find relates factors capturing firm as well inclusion provisions address principal-agent conflicts. Firms allow for ex-post renegotiation have simpler contracts, external pressures associated with greater complexity. has deleterious consequences; lower future performance. And,...

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