While existing literature on equity-based compensation is focused heavily on stock option and restricted stock awards that carry simple time-based vesting restrictions, we find that more complicated performance-based vesting provisions are quite common. We construct and analyze a novel dataset...

We study derivative instruments that corporate insiders use to diversify and hedge their equity ownership. Our evidence suggests that boards might allow use of these instruments in order to mitigate agency costs associated with overvalued equity and high equity-based pay. These instruments are...

This paper provides the first systematic examination of policies and procedures put in place by corporations to regulate trading in the stock by the firm's own insiders. Over 90 percent of oursample companies have their own policy restricting trading by insiders, and nearly 80 percent have...

We examine the role of board connections in explaining how the controversial practice of backdating employee stock options spread to a large number of firms across a wide range of industries. The increase in the likelihood that a firm begins to backdate stock options that can be explained by...

We provide empirical evidence on how the practice of competitive benchmarking affects CEO pay. We find that the use of benchmarking is widespread, and has a significant impact on levels and changes in CEO compensation. The practice is controversial and one view is that it is inefficient because...

We test theories of managerial entrenchment and ability matching by examining the relation between CEO turnover and the level of firm diversification. Our results indicate that CEO turnover in diversified firms is completely insensitive to firm performance. Additional analysis indicates that for...