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

@inproceedings{Faulkender2008InsideTB,
  title={Inside the Black Box : The Role and Composition of Compensation Peer Groups *},
  author={Michael Faulkender and Jun Yang},
  year={2008}
}
  • 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

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