Are All CEOs above Average? An Empirical Analysis of Compensation Peer Groups and Pay Design

By John M. Bizjak, Michael L. Lemmon, Thanh Lai Nguyen. 2011

279 citations recorded by the source corpus.

Subfields: Accounting, Finance

View Paper: https://www.semanticscholar.org/paper/306cd07b1d5b18809857b38c0fba437c89fad31c

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

1. Xavier Gabaix
2. Yaniv Grinstein
3. Martijn Cremers
4. A. Landier
5. Julien Sauvagnat
6. Lawrence R. Mishel
7. J. Bivens
8. John Van Reenen

In Finance

1. Xavier Gabaix
2. A. Landier
3. Julien Sauvagnat
4. Yaniv Grinstein
5. Martijn Cremers
6. Lawrence R. Mishel
7. J. Bivens
8. Markus Pelger

Citations in the corpus

• The Pay of Corporate Executives and Financial Professionals as Evidence of Rents in Top 1 Percent Incomes (2013, background): “Bizjack, Lemmon and Nguyen (2011), for example, find evidence that “peer groups are constructed in a manner that biases compensation upward”.”
• Relative Performance Evaluation and Related Peer Groups in Executive Compensation Contracts (2011, unknown): “Recent studies suggest that firms select highly paid peers to justify excess CEO compensation (Bizjak et al. 2009; Faulkender and Yang 2009).”
• CEO Pay and Firm Size: an Update after the Crisis (2013, background): “They also required the disclosure of peers used for benchmarking compensation, another key driver of pay levels (Faulkender and Yang, 2013; Albuquerque et al., forth; and Bizjak et al., 2011).”
• Peer Choice in CEO Compensation (2012, unknown): “Recent papers by Faulkender and Yang (2010) and Bizjak, Lemmon, and Nguyen (2011) (FY and BLN, respectively) show that, after controlling for similarities between a firm and its chosen peers, firms are more likely to include in their peer group those companies that have higher paid CEOs than those…”
• Is Disclosure an Effective Cleansing Mechanism? The Dynamics of Compensation Peer Benchmarking (2013, unknown): “…the CEO at a potential peer company had significant incremental power in explaining the company’s peer group memberships (Faulkender and Yang 2010; Bizjak, Lemmon, and Nguyen 2011).6 In other words, firms appear to be managing the benchmarking process by including companies with highly paid CEOs…”
• Industry Tournament Incentives (2018, unknown): “Mechanisms for this include peer benchmarking (Bizjak et al. (2010)) and countering an actual or anticipated external offer to the CEO.”
• Does the Market for CEO Talent Explain Controversial CEO Pay Practices (2014, background): “Faulkender and Yang (2010), Cadman and Carter (2011), and Bizjak, Lemmon, and Ngyuen (2013) consider the compensation peer groups that firms report in their proxy statements.”