Tech Report Number
2013-001
Abstract
The use of equity incentives is significantly greater in countries with stronger insider trading restrictions, and these higher incentives are associated with higher total pay. These findings are robust to alternative definitions of insider trading restrictions and enforcement, and to panel regressions with country fixed effects. We also find significant increases in top executive pay and the use of equity-based incentives in the period immediately following the initial enforcement of insider trading laws. We conclude that insider trading laws are one channel through which cross-country differences in pay practices can be explained.
Keywords
Insider trading restrictions, executive compensation, insider ownership
Date of this Version
2013
Included in
Administrative Law Commons, Business Law, Public Responsibility, and Ethics Commons, Corporate Finance Commons, Finance and Financial Management Commons