Peer-Specific Knowledge and Peer Group Properties in Relative Performance Evaluation

IF 16.4 1区化学 Q1 CHEMISTRY, MULTIDISCIPLINARY

Accounts of Chemical Research Pub Date : 2023-10-01 DOI:10.2308/jmar-2022-013

Chung-Yu Hung, Zhenyang Shi

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引用次数: 0

Abstract

ABSTRACT Although relative performance evaluation (RPE) represents an important compensation practice, selecting a relevant peer firm poses a challenge for compensation committees. We study the implications of a committee’s peer-specific knowledge for the peer group property (i.e., RPE relevance). Committees likely know more about firms within their networks, and such peer-specific knowledge increases with their connections to potential peer firms. Our findings suggest that peer-specific knowledge facilitates not only the inclusion of more relevant peer firms, but also the exclusion of less relevant ones. Moreover, the committees incorporate connected peers’ performance information to a greater extent for risk removal. We address identification challenges by including an intensive set of fixed effects to control for characteristics of the focal and the peer firms and by exploiting exogenous changes to the connections between the committees and the peer firms. Our findings suggest that the compensation committee’s peer-specific knowledge facilitates the RPE practice. Data Availability: All data used in this study are publicly available. JEL Classifications: D22; M52; I19.

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相对绩效评价中的同伴特异性知识与同伴群体属性

尽管相对绩效评估(RPE)是一种重要的薪酬实践，但选择相关的同行公司对薪酬委员会构成了挑战。我们研究了委员会的同行特定知识对同行群体属性(即RPE相关性)的影响。委员会可能对其网络中的公司有更多的了解，而这种特定于同行的知识随着他们与潜在同行公司的联系而增加。我们的研究结果表明，同行特异性知识不仅有助于纳入更多相关的同行企业，而且有助于排除不相关的同行企业。此外，委员会在更大程度上纳入了相关同行的绩效信息，以消除风险。我们通过包括一套密集的固定效应来控制焦点公司和同行公司的特征，并通过利用委员会和同行公司之间联系的外生变化来解决识别挑战。我们的研究结果表明，薪酬委员会的同行特异性知识促进了RPE实践。数据可用性:本研究中使用的所有数据都是公开的。JEL分类:D22;M52;I19。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Accounts of Chemical Research 化学-化学综合

CiteScore

31.40

自引率

1.10%

发文量

312

审稿时长

2 months

期刊介绍： Accounts of Chemical Research presents short, concise and critical articles offering easy-to-read overviews of basic research and applications in all areas of chemistry and biochemistry. These short reviews focus on research from the author’s own laboratory and are designed to teach the reader about a research project. In addition, Accounts of Chemical Research publishes commentaries that give an informed opinion on a current research problem. Special Issues online are devoted to a single topic of unusual activity and significance. Accounts of Chemical Research replaces the traditional article abstract with an article "Conspectus." These entries synopsize the research affording the reader a closer look at the content and significance of an article. Through this provision of a more detailed description of the article contents, the Conspectus enhances the article's discoverability by search engines and the exposure for the research.