The disclosure of compensation peer groups is argued to provide shareholders with valuable information that can be used to scrutinize CEO compensation. However, research suggests that there are substantial incentives for executives and directors to bias the compensation peer group such that the...

We study the selection of peers into compensation peer groups reported by U.S. corporations. Securities and Exchange Commission (SEC) regulation requires firms to report these peer groups which are used by investors and shareholders to benchmark the compensation of CEOs. Building on a novel,...