We document that CEO cash compensation is twice as sensitive to negative stock returns as it is to positive stock returns. Since stock returns include both unrealized gains and unrealized losses, we expect cash compensation to be less sensitive to stock returns when returns contain unrealized...

The convention in corporate financial disclosures, ExecuComp, and academic research is to treat the fair value of equity grants to CEOs as compensation for performance in the year of the grant. In contrast, we provide evidence that equity awards, which constitute a dominant share of CEO pay, are...