Why Have CEO Pay Levels Become Less Diverse?

• 成果类型: Article
• 署名作者: Jochem, Torsten; Ormazabal, Gaizka; Rajamani, Anjana
• 署名单位: University of Amsterdam; University of Navarra; IESE Business School; Erasmus University Rotterdam; Erasmus University Rotterdam - Excl Erasmus MC
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082; 1540-6261
• DOI: 10.1111/jofi.70050
• 发表日期: 2026-08
• 页码: 1893-1950
• 关键词: proxy advisory firms; institutional investors; executive-compensation; Peer groups; governance; disclosure; say

摘要

This paper documents a new stylized fact: the cross-sectional variation in CEO pay levels has declined precipitously in recent years. We offer one explanation for this decline, namely, firms are increasingly benchmarking CEO compensation to industry peers closest in size, thereby creating pay clusters. Our empirical tests provide support for this explanation and suggest that the rise of industry-size benchmarking is driven by three institutional factors: the mandatory disclosure of compensation peer groups, proxy advisory influence, and say-on-pay regulation. Our findings highlight a consequence of adopting a one-size-fits-all standard in the pay-setting process.