Non-compliance in Executive Compensation Disclosure

What is it about?

We study the determinants of the decision of Brazilian firms to explicitly refuse disclosing executive compensation after new regulation passed. The goal is to better understand the costs and benefits associated with disclosure. We bring up a new potential cost, the security costs borne by executives in a highly violent environment.

Featured Image

Why is it important?

We leverage an unique setting of explicit refusal, in which the firm's intent is crystal clear. Previous studies focused on disclosure defects, regulator fines, or text complexity, to infer firm intentions. We believe we have a less noisy measure. Furthermore, we see a trend to focus on the benefits of disclosure (e.g., the push for more compensation disclosure around the world), while the discussion of potential costs is set aside. At the end of the day, it is an empirical question whether more disclosure has net benefits.

Perspectives