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Current research shows that firms are more likely to benchmark against peers that pay their Chief Executive Officers (CEOs) higher compensation, reflecting self-serving behavior. We propose an alternative explanation: the choice of highly paid peers represents a reward for unobserved CEO talent....
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increased wage comparisons within firms with geographically-dispersed managers — firms with the greatest information frictions … prior to the rule change. We report three changes related to compensation after 1992 for division managers. First, within … firms with dispersed managers, division manager pay co-moves more with peer pay and is less sensitive to individual …
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We document that firms whose compensation peers experience weak say on pay votes reduce CEO compensation following those votes. Reductions reflect proxy adviser concerns about peers' compensation contracts and are stronger when CEOs receive excess compensation, when they compete more closely...
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