Is Executive Compensation Different Across S&P Listed Firms?
Quartely Journal of Finance and Accounting, Vol 47 (4), 171-192
Posted: 3 Nov 2013
Date Written: November 1, 2008
We investigate, using 13 years of data from 1992 to 2004, whether the total values, determinants, and the forms of executive compensation for firms listed on the S&P 500, S&P Mid Cap, and S&P Small Cap index, are the same or different. We also explore whether the above compensation variables change after the NASDAQ Crash in 2000 and the enactment of the Sarbanes-Oxley (SOX) Act in 2002. Our empirical results reveal that generally the average total compensation and component weights are significantly different across S&P index firms during each sample year and also in years before and after the NASDAQ crash and the enactment of the Sarbanes-Oxley Act. Use of stock options decreases and use of restricted stocks and bonuses increases after the year 2000. We also find that the factors that explain executive compensation in these three groups are generally different and that the determinants and forms of executive compensation change after the NASDAQ crash.
Keywords: Executive Compensation, Stocks (Finance), Prices, Standard & Poor's 500 Index, Wages, NASDAQ Market System
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