Inside the Black Box : The Role and Composition of Compensation Peer Groups *

  title={Inside the Black Box : The Role and Composition of Compensation Peer Groups *},
  author={Michael Faulkender and Jun Yang},
  • Michael Faulkender, Jun Yang
  • Published 2008
This paper documents the features of compensation peer groups and demonstrates that they play a significant role in understanding variation in CEO compensation. We hand-collect a sample of 83 (373) of the S&P 500 firms that provided explicit lists of compensation peer firms in their proxy statements in fiscal year 2005 (2006). Results show that inclusion of the group’s median compensation more than doubles the portion of the variation in CEO salary that can be explained, dominating measures… CONTINUE READING


Publications citing this paper.


Publications referenced by this paper.
Showing 1-10 of 18 references

Executive Compensation

K. Murphy
Orley Ashenfelter and David Card (eds.), Handbook of Labor Economics, • 1999
View 3 Excerpts
Highly Influenced

Has the Use of Peer Groups Contributed to Higher Levels of Executive Compensation?

J. Bizjak, M. Lemmon, L. Naveen
Journal of Financial Economics, • 2008
View 2 Excerpts

The Economics and Super Managers”, working paper, Washington University in St. Louis

N. Baranchuk, G. MacDonald, J. Yang
View 1 Excerpt

Wall Street and Main Street: What Contributes to the Rise in the Highest Incomes?

S. Kaplan, J. Rauh
View 2 Excerpts

An Empirical Examination of the Role of the CEO and the Compensation Committee in Structuring Executive Pay

R. Anderson, J. Bizjak
Journal of Banking and Finance, • 2003
View 2 Excerpts

Executive Compensation as an Agency Problem

L. Bebchuk, J. Fried
Journal of Economic Perspectives, • 2003
View 2 Excerpts

Similar Papers

Loading similar papers…