Executive Compensation

The twelfth lecture in this series was presented by Professor Mary Ellen Carter (Carroll School of Management, Boston College and ECGI) on 9 February 2023.

Executive compensation remains a contentious topic—proponents of the current practices say boards need flexibility to create contracts that reflect the diverse economics of firms; critics say the process is flawed and captured by powerful CEOs. Even when well-intended boards set out to design contracts that provide the right incentives, the resulting pay packages have gotten so complex that investors have difficulty understanding them and executives have many (too many?) levers to focus on. Lots of forces, aside from board characteristics, shape executive compensation contracts. How CEOs are paid and what determines their pay levels and pay forms continues to evolve. This lecture discussed what we know about some of these forces and what the implications of the resulting compensation contracts are.

Professor Mary Ellen Carter studies the effects of financial reporting and regulation on incentives and executive compensation. Recent research includes gender pay gaps, labor market pressures on compensation and the influence of compensation consultants on CEO pay. She has published in top academic journals, including the Journal of Accounting and Economics, Journal of Accounting Research, The Accounting Review, Review of Accounting Studies, and Journal of Financial Economics. In addition, she has been featured in Forbes and the Financial Times, as well as other business media. She is currently an editor at the Journal of Management Accounting Research and an associate editor at Management Science.

The public lecture series is organised by Institute for Corporate Governance (ICG), in partnership with the Ostrom Workshop at Indiana University and ECGI.