We investigate the economic role of proxy advisors (PA) in the context of mandatory “say on pay” votes, a novel and complex item requiring significant firm-specific analysis. PA are more likely to issue an Against recommendation at firms with poor performance and higher levels of CEO pay and...

We investigate the economic role of proxy advisors (PAs) in the context of mandatory "say on pay" votes, a novel and complex item requiring significant firm-specific analysis. PAs are more likely to issue an Against recommendation at firms with poor performance and higher levels of CEO pay and...

We study whether outside directors are held accountable for poor monitoring of executive compensation by examining the reputation penalties to directors of firms involved in the option backdating (BD) scandal of 2006-2007. We find that at firms involved in BD, significant penalties accrued to...

The literature on shareholder voting has mostly focused on the influence of proxy advisors on shareholder votes. We exploit a unique empirical setting enabling us to provide a direct estimate of management's influence. Analyzing shareholder votes on the frequency of future say on pay votes, we...

We examine the consequences of the highly anticipated and controversial Section 953(b) of the Dodd-Frank Act, which mandates companies to disclose the CEO-to-median employee pay ratio starting from 2018. We address endogeneity concerns by using a regression discontinuity design around the public...

Does option-based compensation have a causal influence on payout policy? To address this question we examine the adoption of mandatory expensing of stock options (via accounting standard FAS123R), a plausible exogenous shock to the use of option-based compensation. As FAS123R applies to all...

This monograph explores the relation between corporate governance and executive compensation and evaluates the conditions under which shareholders can benefit from the right to interfere with the pay setting process by voting on the compensation proposed by the board of directors (Say on Pay)....

The credit crisis of 2008 placed compensation practices at publicly traded firms in the United States under scrutiny. This case examines perceived excessive pay and severance packages at several firms implicated in the credit crisis of 2008, the executive compensation provisions in the Emergency...