Executive Pay and the Disclosure Environment: Canadian Evidence

Posted: 15 Jul 2000

See all articles by Yun W. Park

Yun W. Park

College of Business Administration and Economics, Chung-Ang University

Toni Nelson

University of Lethbridge - Faculty of Management

Mark R. Huson

University of Alberta - Department of Finance and Statistical Analysis

Abstract

We examine the economic consequences of the Ontario Securities Commission's requirement that firms disclose details of executive pay in proxy statements. Before 1993, Canadian firms only reported executive compensation in the aggregate. We predict the increased availability of compensation information will force boards of directors to compete in the managerial labor market by offering higher pay. We also predict public pressure on boards of directors to justify the level of executive pay will result in increased weight being placed on incentive pay. The data support these hypotheses. We also document that pay-performance sensitivity has increased.

JEL Classification: G30

Suggested Citation

Park, Yun W. and Nelson, Toni and Huson, Mark R., Executive Pay and the Disclosure Environment: Canadian Evidence. Journal of Financial Research. Available at SSRN: https://ssrn.com/abstract=233636

Yun W. Park (Contact Author)

College of Business Administration and Economics, Chung-Ang University ( email )

221 Hukseuk-Dong
Seoul 156-756
Korea

Toni Nelson

University of Lethbridge - Faculty of Management

4401 University Drive
Lethbridge, Alberta TIK 3M4
Canada

Mark R. Huson

University of Alberta - Department of Finance and Statistical Analysis ( email )

4-20C Business
University of Alberta
Edmonton, Alberta T6G 2R6
Canada
780-492-2803 (Phone)
780-492-3325 (Fax)

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