Are all CEOs above average? An empirical analysis of compensation peer groups and pay design

• 成果类型: Article
• 署名作者: Bizjak, John; Lemmon, Michael; Thanh Nguyen
• 署名单位: Texas Christian University; Utah System of Higher Education; University of Utah; Hong Kong University of Science & Technology; California State University System; California State University Fullerton
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2011.02.007
• 发表日期: 2011
• 页码: 538-555
• 关键词: Executive compensation; benchmarking; Peer groups; ceo pay

摘要

Companies can potentially use compensation peer groups to inflate pay by choosing peers that are larger, choosing a high target pay percentile, or choosing peer firms with high pay. Although peers are largely selected based on characteristics that reflect the labor market for managerial talent, we find that peer groups are constructed in a manner that biases compensation upward, particularly in firms outside the Standard & Poor's (S&P) 500. Pay increases close only about one-third of the gap between the pay of the Chief Executive Officer (CEO) and the peer group, however, suggesting that boards exercise discretion in adjusting compensation. Preliminary evidence suggests that increased disclosure has reduced the biases in peer group choice. (C) 2011 Elsevier B.V. All rights reserved.