This website uses cookies to help us give you the best experience when you visit our website. By continuing to use this website, you consent to our use of these cookies.
Read more
We document that, over the last decade, the cross-sectional variation in CEO pay levels has declined precipitously, both at the economy level and within industry and industry-size groups.
We find evidence consistent with one potential explanation for this pattern; reciprocal benchmarking (i.e., firms are more likely to include each other in the disclosed set of peers used to benchmark pay levels). We also find empirical support for three factors contributing to the increase in reciprocal benchmarking; the mandatory disclosure of compensation peer groups, say on pay, and proxy advisory influence. Finally, we find that reciprocal benchmarking has meaningful consequences on managerial behavior; it reduces risk-taking by weakening external tournament incentives.
Recent research shows that a high wage gap between managers and workers identifies better-performing firms, but the stock market does not seem to price...
We document a new channel through which a firm’s sustainability policies can contribute positively to its bottom line, by reducing labor costs and by...
Fiduciary duties in the vicinity of insolvency form a notoriously murky area where legal space warps. Courts openly acknowledge that it is difficult to...