Working Paper: NBER ID: w10742
Authors: Lucian Arye Bebchuk; Jesse M. Fried
Abstract: This paper analyzes an important form of "stealth compensation" provided to managers of public companies. We show how boards have been able to camouflage large amount of executive compensation through the use of retirement benefits and payments. Our study highlights the significant role that camouflage and stealth compensation play in the design of compensation arrangements. Our study also highlights the significance of whether information about compensation arrangements is not merely publicly available but also communicated in a way that is transparent and accessible to outsiders.
Keywords: No keywords provided
JEL Codes: D23; G32; G34; G38; J33; J44; K22; M14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| perceived compensation fairness (M52) | board behavior (C92) |
| design of retirement benefits (H55) | ability of executives to extract higher compensation (M12) |
| perceived outrage (D91) | less favorable compensation arrangements for executives (M12) |
| design of retirement pensions, SERPs, and deferred compensation (J32) | visibility of executive pay (M12) |
| external perceptions (E66) | board decisions (G34) |
| shareholder sentiment (G34) | executive compensation structures (M52) |