Insider trading restrictions and top executive compensation

David J. Denis and Jin Xu

Journal of Accounting and Economics, 2013, vol. 56, issue 1, 91-112

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 (search for similar items in EconPapers)
JEL-codes: G18 G32 G34 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (23)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaecon:v:56:y:2013:i:1:p:91-112

DOI: 10.1016/j.jacceco.2013.04.003

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