Essays on compensation

This dissertation consists of three studies on the determinants of compensation. The first two chapters examine the compensation of sell-side equity research professionals. The first paper uses proprietary data from a mid-market investment bank for the years 2004-2007 to investigate how cross sectional variation in junior researchers' carrer aspirations and human capital characteristics (education, tenure, and outside work experience) is related to cross-sectional variation in their performance and remuneration. Chapter 2 examines the compensation of senior sell-side equity researchers. Using proprietary data from a leading investment bank for the years 1988-2005, we show that three factors drive the compensation of senior equity research professionals: the researcher's customer satisfaction ratings, the scale of the researcher's portfolio, and the researcher's contributions to the firm's investment banking operations. Chapter 3 examines the effect of shareholder voting rights on executive compensation design. Specifically, we examine the effect on CEO pay of new legislation introduced in the United Kingdom (UK) at the end of 2002 that mandates an annual, nono-binding shareholder vote ("say on pay") on the executive pay report prepared by the board of directors.