Does Better Access to Disclosure Curb CEO Pay? Evidence from a Modern Information Technology Improvement

Abstract

We provide evidence that better access to disclosure curbs CEO pay. Using a difference-indifferences estimation around the staggered implementation of the SEC EDGAR platform from 1993 to 1996, we find that total CEO pay drops by 7-15% following EDGAR implementation. This effect is more pronounced for highlypaid CEOs, equity-based pay, and firms with unions or those located in left-leaning states. Media coverage of executive pay increases following EDGAR adoption, particularly around proxy filing dates. Additionally, we find higher voluntary CEO turnover post-EDGAR, with the market showing a more negative response to CEO turnover announcements, suggesting negative implications for firm value.

Keywords: Executive compensation, disclosure, incentives, CEO turnover JEL codes: G30, G32

JEL Classification: G30, G32