Executive compensation serves as a metric by which investors measure the quality of a firm's governance. In this paper, I explore how the signaling role of executive compensation impacts the compensation decisions of boards. I show that reputational concerns often cause boards to adopt pay...

Executive compensation is said to be for performance and, in liberal market economies, the board of directors along with compensation committees have largely been in charge of safeguarding pay for performance. This executive compensation system is legally protected by the business judgment rule...

In Closer Look, we highlight significant “holes” in our knowledge of corporate governance. These are central issues where insufficient or inadequate study has left us unable to answer basic questions, and where key assumptions relied upon by experts have not been verified or validated. While...