How companies determine executive compensation plays a critical role in corporate governance by helping recruit, motivate, and retain key employees. Not surprisingly, it has attracted broad attention from academics, investors, regulators, and the general public. In a recent study, we introduce a toolset for extracting relevant information from narrative disclosures and seek to provide novel insights into the compensation-setting process and facilitate further research on firms’ compensation decisions.
Research on executive compensation has largely focused on quantitative measures such as total pay level, cash bonus, and equity incentives. Given the wealth of other information that firms disclose about executive compensation, … Read more