In this study, I summarize the current state of executive compensation, discuss measurement and incentive issues, document recent trends in executive pay in both U.S. and international firms, and analyze the evolution of executive pay over the past century. Most recent analyses of executive...

The most influential theory of corporate governance, principal agency theory, does not take into consideration that the key task of modern corporations is to generate and transfer firm-specific knowledge. It proposes that, in order to overcome the widespread corporate scandals, the interests of...

The competitive target pay policy sets a target amount of total compensation within a specified range of the amount paid to executive peers. If such a policy were widely adopted by compensation committees, we would observe a negative cross-sectional association between the stock price...

This study examines whether marriage, as a social construct and cultural norm, can affect firm-level stock price crash risk. We find that firms managed by married CEOs are associated with lower future stock price crash risk, after controlling for a set of firm characteristics and CEO traits. We...

The Internet Appendix provides examples of the CEO pay ratio disclosure and media coverage surrounding the CEO pay ratio disclosure, the description of entropy balancing program, the procedure for decomposing the pay ratio into predicted and unexpected components, summary statistics for...

We present a modified principal-agent model to identify a link between the anticipated likelihood of future CEO turnover and the optimal sensitivity of incentive pay to firm performance. The analysis focuses on the optimal sequence of standard one-period incentive contracts when CEO effort...

CEOs with substantial short-term monetary incentives behave myopically out of concerns for the stock price. One potential target for managerial myopia is corporate tax avoidance. We show that, ceteris paribus, CEO short-term monetary incentives are associated with declines in cash effective tax...