Title: Increased compensation costs as an externality of mandatory executive compensation disclosure: evidence from Canada

Authors: Patrice Gelinas, Michel Magnan, Sylvie St-Onge

Addresses: School of Administrative Studies, Atkinson Faculty of Liberal and Professional Studies, York University, 4700 Keele Street, Atkinson Building, office 254, Toronto, ON, M3J 1P3, Canada. ' John Molson School of Business, Concordia University, 1455 de Maisonneuve Blvd. West, Montreal, Quebec, H3G 1M8, Canada. ' HEC Montreal, 3000 chemin de la Cote-Sainte-Catherine, Montreal, Quebec, H3T 2A7, Canada

Abstract: As Canadian policy makers review the disclosure expectations regarding executive compensation paid by publicly traded companies, we investigate how the implementation of mandatory executive compensation disclosure impacts executive compensation levels. A regression analysis of Canadian CEOs| pay increases between 1992 and 1997 reveals that disclosure regulation disciplines some firms to align the pay with that of relevant peers, but it stimulates others to target the top pay level in the market.

Keywords: executive compensation; disclosure regulations; Canada; CEO compensation; governance; public policy; regulatory environment; empirical study; publicly traded firms; private firms; business environment; mandatory disclosure; pay increases.

DOI: 10.1504/IJBE.2009.023797

International Journal of Business Environment, 2009 Vol.2 No.3, pp.376 - 390

Received: 29 Oct 2008
Accepted: 06 Nov 2008
Published online: 11 Mar 2009 *

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