Secondary Titles (2)
- Director, Institute for Corporate Governance
- Arthur M. Weimer Faculty Fellow
Jun Yang is an associate professor of Finance at Kelley School of Business, Indiana University. Her research interests include optimal contracting, corporate governance, and executive compensation. Jun’s work on opportunistic managerial behavior in compensation peer benchmarking practice was published by the Journal of Financial Economics (JFE) and Review of Financial Studies. Her most recent publication at the JFE documents the characteristics and economic determinants of executive signing bonuses. Jun’s current research investigates opportunistic managerial behavior related to executive pensions and various factors that may affect the nature of director independence (e.g., collusive insider selling of independent directors with the CEO, and corporate charitable contributions to independent directors-affiliated charities).
Industry Expertise (4)
Areas of Expertise (6)
Larry Lang Corporate Finance Best Paper Award (professional)
This award was presented at the European Financial Management Association 2016 Annual Meeting.
Washington University in Saint Louis: Ph.D., Finance 2005
Chinese University of Hong Kong: Ph.D., Operations Management 1997
Tsinghua University: M.S., Management Information Systems 1994
Tsinghua University: B.S., Electronics and Computer Technology 1991
Paying by Donating: Corporate Donations Affiliated with Independent DirectorsReview of Financial Studies
Forthcoming Corporate donations to charities affiliated with the board’s independent directors (affiliated donations) are large and mostly undetected due to lack of formal disclosure. Affiliated donations may impair independent directors’ monitoring incentives. CEO compensation is on average 9.4% higher at firms making affiliated donations than at other firms, and it is much higher when the compensation committee chair or a large fraction of compensation committee members are involved. We find suggestive evidence that CEOs are unlikely to be replaced for poor performance when firms donate to charities affiliated with a large fraction of the board or when they donate large amounts.
Pay Me Now (and Later): Pension Benefit Manipulation before Plan Freezes and Executive RetirementJournal of Financial Economics
2018 Large US firms modify top executives’ compensation before pension-related events. Top executives receive one-time increases in pensionable earnings through higher annual bonuses one year before a plan freeze and one year before retirement. Firms also boost pension payouts by lowering plan discount rates when top executives are eligible to retire with lump-sum benefit distributions. Increases in executive pensions do not appear to be an attempt to improve managerial effort or retention and are more likely to occur at firms with poor corporate governance. These findings suggest that in some circumstances managers are able to extract rents through their pension plans.
Golden hellos: Signing bonuses for new top executivesJournal of Financial Economics
2016 We examine signing bonuses awarded to executives hired for or promoted to named executive officer (NEO) positions at Standard & Poor's 1500 companies during the period 1992–2011. Executive signing bonuses are sizable and increasing in use, and they are labeled by the media as “golden hellos.” We find that executive signing bonuses are mainly awarded at firms with greater information asymmetry and higher innate risks, especially to younger executives, to mitigate the executives’ concerns about termination risk. When termination concerns are strong, signing bonus awards are associated with better performance and retention outcomes.
The Economics of Super ManagersReview of Financial Studies
2011 We study a competitive model in which managers differ in ability and choose unobservable effort. Each firm chooses its size, how able a manager is to hire, and managerial compensation. The model can be considered an amalgam of agency and Superstars, where optimizing incentives enhances the firm's ability to provide a talented manager with greater resources. The model delivers many testable implications. Preliminary results show that the model is useful for understanding interesting compensation trends, for example, why CEO pay has recently become more closely associated with firm size. Allowing for firm productivity differences generally strengthens our results.
Inside the Black Box: The Role and Composition of Compensation Peer GroupsJournal of Financial Economics
2010 This paper considers the features of the newly disclosed compensation peer groups and demonstrates their significant role in explaining variations in chief executive officer (CEO) compensation beyond that of other benchmarks such as the industry-size peers. After controlling for industry, size, visibility, CEO responsibility, and talent flows, we find that firms appear to select highly paid peers to justify their CEO compensation and this effect is stronger in firms where the compensation peer group is smaller, where the CEO is the chairman of the board of directors, where the CEO has longer tenure, and where directors are busier serving on multiple boards.