Dollars and Jens
Tuesday, April 24, 2007
Executive Compensation
I've heard it suggested (by, among others, Warren Buffett) that disclosure of executive compensation drives envy, which drives salaries up, rather than making compensation committees and executives more accountable to their shareholders. Professor Bainbridge points to a study that finds that, while disclosure does correspond to an increase in executive compensation, this is entirely explained by an increase in performance-based compensation and an improvement in performance.

If you have access to SSRN, you can read the paper here.

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