Does Better Access to Disclosure Curb CEO Pay? Evidence from a Modern Information Technology Improvement
65 Pages Posted: 31 Jul 2023 Last revised: 13 Jan 2025
Date Written: May 3, 2024
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
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