{"69912":{"#nid":"69912","#data":{"type":"event","title":"Is Disclosure an Effective Cleansing Mechanism? The Dynamics of Compensation Peer Benchmarking","body":[{"value":"\u003Cp\u003ETITLE:\u0026nbsp; Is Disclosure an Effective Cleansing Mechanism? The Dynamics of\n\u003Cbr \/\u003ECompensation Peer Benchmarking\u003C\/p\u003E\u003Cp\u003ESPEAKER:\u0026nbsp; Professor Jun Yang\u003C\/p\u003E\u003Cp\u003EABSTRACT:\u003C\/p\u003E\u003Cp\u003EIt has become a regular practice for firms to justify their CEO \ncompensation by referring to a group of companies with highly paid CEOs, \nclaiming they compete for managerial talent with those selected peer \ncompanies. This paper examines the dynamics of the peer benchmarking \nprocess, addressing whether the 2006 regulatory requirement of disclosing \ncompensation peers has cast sunshine on the practice and thus mitigated \nfirms\u0027 opportunistic behavior of benchmarking CEO compensation against a \ngroup of self-selected, highly-paid peer CEOs (Faulkender and Yang, 2010; \nBizjak, Lemmon, and Nguyen, 2011). Our evidence shows the manipulation of \nthe benchmarking process did not stop after disclosure became mandatory \nin 2006. It actually became more severe at firms that received \nsubstantial shareholder complaints about their compensation practices, \nand at firms with low institutional ownership, busy Boards of Directors, \nand large Boards of Directors. These findings call into question the \nability of mere disclosure to remedy potential abuses in determining \nexecutive compensation.\n\u003Cbr \/\u003E\n\u003Cbr \/\u003EBio:\n\u003Cbr \/\u003E\nJun Yang has been an Assistant Professor of Finance at Kelley School of\nBusiness, Indiana University since 2005. Jun\u0027s research interest is in\nthe areas of Financial Contracting,\u0026nbsp; Corporate Governance, and Executive\nCompensation. Jun has publications at top quality journals such as\nJournal of Financial Economics, Review of Financial Studies, Management\n\u003Cbr \/\u003EScience, Journal of Economic Theory, and Production and Operations\nManagement. Jun received her Ph.D. in Finance from Washington University\nin Saint Louis in 2005, and Ph.D. in Operations Management from The\nChinese University of Hong Kong in 1997. Her M.Sc. and B.Sc. (summa cum\nlaude) are from Tsinghua University in China.\u003C\/p\u003E","summary":null,"format":"limited_html"}],"field_subtitle":"","field_summary":"","field_summary_sentence":[{"value":"Is Disclosure an Effective Cleansing Mechanism? The Dynamics of Compensation Peer Benchmarking"}],"uid":"27187","created_gmt":"2011-09-08 15:06:04","changed_gmt":"2016-10-08 01:55:42","author":"Anita Race","boilerplate_text":"","field_publication":"","field_article_url":"","field_event_time":{"event_time_start":"2011-09-15T12:00:00-04:00","event_time_end":"2011-09-15T13:00:00-04:00","event_time_end_last":"2011-09-15T13:00:00-04:00","gmt_time_start":"2011-09-15 16:00:00","gmt_time_end":"2011-09-15 17:00:00","gmt_time_end_last":"2011-09-15 17:00:00","rrule":null,"timezone":"America\/New_York"},"extras":[],"groups":[{"id":"1242","name":"School of Industrial and Systems Engineering (ISYE)"}],"categories":[],"keywords":[],"core_research_areas":[],"news_room_topics":[],"event_categories":[],"invited_audience":[],"affiliations":[],"classification":[],"areas_of_expertise":[],"news_and_recent_appearances":[],"phone":[],"contact":[],"email":[],"slides":[],"orientation":[],"userdata":""}}}