The hypothesized (H1) relation between the sensitivity of the CEO’s performance-based compensation
structure (e.g. aggregate stock options, restricted and unrestricted equity, long-term incentive payouts, and salary
plus bonus) and the propensity to disclose ICW is estimated to be the following baseline logistic regression:
where variables are defined below, and i indicates the firm and t indicates the year. Firms reporting one or more
ICW are only included in the analysis for the first year they report. Firms never reporting an ICW during the sample
period (the control sample) are included for all years available. The observations are pooled.