Understanding CEO compensation plans is a continuing challenge for directors and investors. The disclosure of these plans is dictated by SEC rules that rely heavily on the “fair value” of awards at the time they are granted. The problem with these numbers is that they are static and do not...

This paper examines the integration of ESG performance metrics into executive compensation using a detailed panel dataset of European executives. Despite becoming more widespread, most ESG metrics are largely discretionary, carry immaterial weights in payout calculations, and contribute little...

Clawbacks are contractual provisions in executive compensation contracts that allow for an ex post recoupment of variable pay if certain triggering conditions are met. As a result of regulatory responses to financial crises and corporate scandals as well as of growing shareholder pressure to...

We provide fresh evidence regarding the relation between compensation consultants and CEO pay. First, firms that employ consultants have higher-paid CEOs—this result is robust to firm fixed-effects and matching on economic and governance variables. Second, while this relation is partly due to...

The hottest topic in corporate governance circles today involves company commitments to and pursuit of ESG (environmental, social, and governance) initiatives in addition to the traditional pursuit of profits. One facet of this debate has to do with how to motivate executives to pursue ESG...

This paper presents theoretical analysis of how career concerns and shareholder monitoring affect chief executive officer (CEO) agency costs. We investigate investment efficiency prior to CEO retirement based on a sample of Chinese state-owned enterprises (SOEs) during the 1999-2007 period and...

We explore the determinants of compensation gaps between a firm's CEO and its other top executives, and compare the ability of two competing optimal contracting theories, namely tournament theory and productivity theory, to explain the cross sectional variability in these gaps across firms. We...

On July 1, 2015, the Securities and Exchange Commission (SEC) proposed an excess-pay clawback rule to implement the provisions of Section 954 of the Dodd-Frank Act. I explain why the SEC's proposed Dodd-Frank clawback, while reducing executives' incentives to misreport, is overbroad. The economy...