​This study examines the performance impact of the relative quality of a CEO's compensation peers (peers selected to determine a CEO's overall compensation) and bonus peers (peers selected to determine a CEO's relative-performance-based bonus). We use the fraction of peers with greater...

This study examines the performance impact of the relative quality of a CEO's compensation peers (peers selected to determine a CEO's overall compensation) and bonus peers (peers selected to determine a CEO's relative-performance-based bonus). We use the fraction of peers with greater managerial...

We show that increases in CEO compensation at new S&P 500 members affect CEO compensation at other firms through compensation peer benchmarking. This compensation contagion propagates via three channels. Direct competition for managerial talent forces firms to respond to peers' pay increases....