According to the rent-extraction hypothesis, weak corporate governance allows entrenched CEOs to capture the pay-setting process and benefit from events outside of their control - get paid for luck. In this paper, I find that the independence requirement imposed on boards of directors by the...

Pay for non-performance is among the most prominent arguments of executive rent extraction, especially Bertrand and Mullainathan's (2001) pay for luck. We revisit their finding over the last two decades, 1997 through 2016. Pay for luck presents in the first decade but declines in the second...

In this article, we analyze whether the manipulation of stock options still continues to this day. Our evidence shows that executives continue to employ a variety of manipulative devices to increase their compensation, including backdating, bullet-dodging, and spring- loading. Overall, we find...

This paper analyzes the impact of price targets from the IBES Detail Price History Target database on executive compensation. I find that analysts' price targets alter the composition of executive pay. In particular, I find that when analysts forecast a rise in the share price for a firm, the...

This paper examines why powerful CEOs are paid more in total compensation. Broadly, our results are consistent with the managerial ability view. First, CEO power is endogenously determined reflecting the CEO's ability. Specifically, founder-CEOs are more powerful than professional- and heir-CEOs...

Over the last decade, executive compensation has attracted the attention from corporate governance specialists and the general public. After briefly examining the purposes of executive compensation, this paper focuses on the governance problems posed by remuneration schemes. It considers the...

We investigate the key contractual features of CEO performance-vested (p-v) equity compensation. We hypothesize that contractual features such as relative performance evaluation (RPE), the performance period length, and the number of performance metrics can be configured to improve the...

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...