How to deal with missing CEO identifier(CEOANN) and total compensation in Executivecomp?
Posted: 15 July 2013 11:02 AM   [ Ignore ]
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Hello guys,

I am downloading CEO compensation data from Executive Comp database from 1992-1997. When I used the CEO flag (ceoann) provided in the database to identify CEO, I found that I cannot identify all CEOs in all firm-year observations since some CEO identifiers are missing. Moreover I think there are some mistakes as well, for example, Executivecomp identifies one officer is CEO in 1993 but the year he/she became CEO is 1999.

I can use two variables, Date became CEO and Date left as CEO to fill some missed CEO flag.  I also search on the internet to get information, such as Forbes. However, I still cannot identify all CEOs. I searched DEF-14A filing and 10-K filing to identify CEO, however, I found that the earliest date for those filings is 1994 so I cannot accurately identify CEO in each firm in 1992 or 1993.

For the missing compensation data(total compensation and components, especilly value of option granted), should I look up information in DEF-14A and 10-K? But the same problem that I can only find filings back to 1994 exists, so I cannot find compensation data in 1992 or 1993 when they are missing in Executivecomp.

I am wondering is there a good way to deal with these issues in the database?

Thank you very very much!!!

Best Regards,

Yue

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Posted: 18 July 2013 07:39 PM   [ Ignore ]   [ # 1 ]
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hi Yue,

This is an excellent question that I don’t know the answer to. I will make a copy of your question and post it on the home-page. Since this website does not attract that much traffic it makes sense to try the Wharton wrds forum/other sources.

If you don’t mind I would appreciate if you would post the answer here when you find the answer.

thanks,

Joost

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Posted: 07 August 2013 12:54 AM   [ Ignore ]   [ # 2 ]
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Hello Guys

I ask some people about this question, and it seems no one has a good answer. I post the way I deal with the issue as follows. Hope we can discuss this. Thank you!

(1). I use two variables in the database, Date Became as CEO and Date Left as CEO, to extract the year one executive became and left as CEO. Then, I can calculate tenure for each CEO. I drop those observations which have both missing tenure and CEO identifier information.

(2). I also extract the month that one executive became and left as CEO. There are two cases. The first case is for firms whose fiscal year end is between January and May. For these firms, I drop those observations in which year became as CEO is larger than fiscal year plus one OR year left as CEO is less than fiscal year.

The second case is for firms whose fiscal year end is between June and December. I drop observations in which year became as CEO is larger than fiscal year OR year left as CEO is less than fiscal year minus one. I drop those observations because they are obviously wrong since the identified CEO cannot be the true CEO in the fiscal year in these cases.

3. I identify one executives as CEO if the fiscal year is between his/her year became as CEO and year left as CEO. Therefore, if Execucomp does not identify CEO in this case, I fill in the missing information.

4. After implementing these three steps, I drop those observations having two CEOs in one year. Moreover, I drop those CEOs whose tenure is less than one year since for these CEOs the compensation is not for the whole year.

5. In order to identify CEOs in the left cases, we should be more careful since we have to calculate the tenure of each CEO (in months) in one fiscal year. Since the definition of fiscal year for firms with fiscal year end month between January and May is different from that for firms with fiscal year end month between June and December, the way to calculate CEO tenure in one fiscal year depends on when one firm ends the fiscal year. There are totally seven cases.

(I) (a) If one executive in one firm which has fiscal year end month between January and May became CEO in calendar year equals fiscal year and did not leave in the next year OR became CEO in calendar year equals fiscal year and left in the next year but left month as CEO is larger than fiscal year end month

OR (b) If one executive in one firm which has fiscal year end month between June and November became CEO in calendar year equals fiscal year minus one and did not leave in the next year OR became CEO in calendar year equals fiscal year minus one and left in the next year but left month as CEO is larger than fiscal year end month

Then the tenure in the fiscal year equals fiscal year end month plus 12 minus month became as CEO.

(II) (a) If one executive in one firm which has fiscal year end month between January and May became CEO in calendar year equals fiscal year plus one;

OR (b) If one executive in one firm which has fiscal year end month between June and December became CEO in calendar year equals fiscal year

Then the tenure in the fiscal year equals fiscal year end month minus month became as CEO.

(III) If one executive in one firm left as CEO in calendar year equals fiscal year, the tenure in the fiscal year equals month left as CEO minus fiscal year end month minus one.

(IV) (a) If one executive in one firm which has fiscal year end month between January and May left as CEO in calendar year equals fiscal year plus one;

OR (b) If one executive in one firm which has fiscal year end month between June and November left as CEO in calendar year equals fiscal year minus one

Then the tenure in the fiscal year equals month left as CEO minus fiscal year end month.

(V) (a) If one executive in one firm which has fiscal year end month between January and May became CEO in calendar year equals fiscal year and left in the next year but left month as CEO is less than or equal to fiscal year end month

OR (b) If one executive in one firm which has fiscal year end month between June and November became CEO in calendar year equals fiscal year minus one and left in the next year but left month as CEO is less than or equal to fiscal year end month

Then the tenure in the fiscal year equals month left as CEO plus 12 minus month became as CEO.

(VI) If one executive in one firm which has fiscal year end month December became as CEO in calendar year which equals to fiscal year minus one and did not leave in the next year, he/she is identified as CEO in this fiscal year.

(VII)(a) If one executive in one firm which has fiscal year end month December became as CEO in calendar year which equals to fiscal year minus one and left in the next year;

OR (b)If one executive in one firm which has fiscal year end month December became as CEO in calendar year which equals to fiscal year

Then the tenure in the fiscal year equals month left as CEO minus one.

I identify one executive as CEO in one firm in each fiscal year if the tenure in each fiscal year is larger than or equal to 6 months.

6. I drop those observations with missing CEO identifier and obtain the CEO sample.

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Posted: 09 August 2013 07:35 PM   [ Ignore ]   [ # 3 ]
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hi Yue,

Thanks for following up here with your solution. It looks a little intimidating though smile

Do I understand correctly that (in the end) you have a date for both the beginning and ending of the tenure? (Or do you sometimes only have a year?) If you have dates (and maybe if some exact dates are missing), it could be simpler and a bit more precise to take the difference between those two dates (i.e., the number of days). You can always round that up/down to years if needed. That would simplify things a bit, because then this fiscal/calendar year issue is not relevant.

best regards,

Joost


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Posted: 09 August 2013 11:19 PM   [ Ignore ]   [ # 4 ]
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Hello Joost,

Thank you for your reply!!!

Yes, I have dates for the beginning and ending of the tenure for some executives. I should use the dates to calculate the tenure dates and this would simply the matter. I admit my method is messy…..


Thank you very much for your suggestions!!!

Best,

Yue

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Posted: 10 August 2013 09:46 AM   [ Ignore ]   [ # 5 ]
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hi Yue,

You’re welcome, I am glad I could be of some help. smile

Joost

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