Measuring Executive Compensation
24 Pages Posted: 27 Jun 2017
Date Written: June 26, 2017
This note describes how meaningful measures of executive compensation can be extracted from the proxy statements that firms send to shareholders each year. It shows where the information needed to calculate such measures can be found and why the most informative measures of executive pay differ from the headline figures reported in the summary compensation table. The proposed method for measuring compensation is demonstrated using the example of the executive with the highest reported pay in FY2016, Thomas Rutledge of Charter Communications.
Keywords: executive compensation, employee stock options
JEL Classification: G34, M12
Suggested Citation: Suggested Citation