Governance#315tier 1experimental liveNew

`exec comp pay ratio shift`

cadence: Annualdata: mediumshort only

2010

Frydman, C., Saks, R. E. (2010). "Executive Compensation: A New View from a Long-Term Perspective, 1936-2005." Review of Financial Studies, 23(5), 2099-2138. Also Edmans-Gabaix 2016 ARFE.

Read the paper →

What it checks

When CEO pay relative to median worker pay jumps sharply, board discipline tends to weaken and the stock tends to underperform over 1-2 years.

Mechanism

Sharp Y/Y increases in CEO pay-ratio (or absolute CEO total comp) signal agency-conflict heat: boards lose discipline, managerial rents extract from shareholders. Returns underperform over 1-2 years.

No production champion data for this family yet. Stats appear once the discovery pipeline promotes at least one strategy with this family tag, or once a multi-family blend that includes it earns a champion slot.

Signal rule

sec_def14a_filings.ceo_pay_ratio Y/Y delta own-z >= 1.0 -> SHORT 180/365d

Data dependencies

daily_prices
Adjusted-close OHLCV for every US-listed ticker; primary price feed.
sec_def14a_filings
Worker data table — see services/worker schema.

Expected edge

Paper alpha: ~3-5% over 12mo on top-decile
Paper window: T+1 to T+365d

Frydman-Saks 2010 / Edmans-Gabaix 2016: top-decile pay-ratio expansion ~3-5% underperformance over 12mo.

Related families

def14a comp shiftFilings

Year-over-year shift in DEF 14A executive-compensation language; expansion predicts earnings management.

proxy contest driftEvent

Proxy contests (DFAN14A) earn ~6-8% CAR over [-20, +250].

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exec comp pay ratio shift