We investigate the economic forces that influence noncompliance with mandatory compensation disclosures and the effect of a subsequent targeted enforcement action. We utilize SEC evaluations of compensation disclosures mandated by rules adopted in 2006 to examine whether noncompliance with the new regulations is associated with excessive CEO compensation, proprietary costs, or previous media attention. We also test whether subsequent CEO compensation is associated with the level of noncompliance identified by these publicized SEC reviews. We construct several measures of defective disclosures from SEC comment letters and find that disclosure defects are positively associated with excess CEO compensation and media criticism of CEO compensation during the previous year. We find no evidence supporting the contention that compensation disclosure defects are associated with proprietary costs. Furthermore, we are unable to document that the level of disclosure defects identified by the SEC is associated with a reduction in excess CEO compensation in the subsequent year.
| Speaker: | Dr Yong YU Assistant Professor, The University of Texas at Austin |
| When: |
2.00 pm - 3.30 pm |
| Venue: | School of Accountancy [Map] Level 4, Meeting Room 4.1 |
| Contact: | Office of the Dean Email: SOAR@smu.edu.sg |