The impact of disclosure obligations on executive compensation - A policy evaluation using quantile treatment estimators
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Date
2016
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Abstract
This empirical study analyses the effects of the introduction of strongly increased
disclosure requirements in Germany on the level of executive compensation. One
innovative aspect is the comparison of companies which voluntarily followed a
recommendation of the German Governance Code before the relevant law was
implemented and published detailed information on executive compensation with
other firms which did not. Conditional and unconditional quantile difference-indifferences
models are estimated. The companies which refused to publish data
before it became mandatory show a reduction in compensation levels for the upper
quantiles. Hence, the mandatory requirement to publish detailed information
reduced the higher levels of executive compensations, but did not affect executive
compensation at lower or medium levels.
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Keywords
executive compensation, quantile treatment effect, policy evaluation, corporate governance regulation, disclosure obligations