Executive compensation consultants face potential conflicts of interest that can lead to higher recommended levels of CEO pay, including the desires to ldquo;cross-sellrdquo; services and to secure ldquo;repeat business.rdquo; We find evidence in both the US and Canada that CEO pay is higher in...

We provide fresh evidence regarding the relation between compensation consultants and CEO pay. First, firms that employ consultants have higher-paid CEOs—this result is robust to firm fixed-effects and matching on economic and governance variables. Second, while this relation is partly due to...