What is it about?

Insider trading is an implicit way to compensate managers. Therefore, when it is being restricted, executives demand higher compensation.

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Why is it important?

It is important for boards of directors to understand the relationship between insider trading laws and rules and the compensation demanded by corporate executives. With this knowledge, they can make more informed executive compensation decisions.

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This page is a summary of: Insider trading restrictions and top executive compensation, Journal of Accounting and Economics, July 2013, Elsevier,
DOI: 10.1016/j.jacceco.2013.04.003.
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