New Research on Impact of Compensation Consultants
A recent study by researchers from the University of Cambridge suggests compensation consultants are hired by companies to justify higher CEO pay to stakeholders. The study analyzes three scenarios in the years between 2006 and 2012: how pay changed when companies switched from a multi-service consultant to an executive compensation specialist, how pay differed when compensation consultants were retained by management instead of by the board, and how pay changed when a company with no compensation consultant hired one. The authors also criticize the 2009 SEC rules that were intended to eliminate the conflicts of interests faced by multi-service consultants, saying that both management and pay consultancies find ways to circumvent the rules.
- Do Comp Consultants Lead to Higher Pay? | Agenda (subscription required) | November 17, 2014
- Do Compensation Consultants Enable Higher CEO Pay? New Evidence from Recent Disclosure Rule Changes | University of Cambridge | September 23, 2014