Before revision:  We ensure that the abnormal performance associated with employee remuneration is not explained by other factors, such as stock indexes, capitalization, book-to-market value , or momentum. A plausible rational explanation of the remuneration anomaly involves the positive correlation between pay and employee performance.
After revision:  Moreover, the companies adopting similar remuneration policies share a common risk, which is comparable to that of the value premium. For this purpose,we set up an original methodology that uses firm financial characteristics to build factors that are less correlated than in the standard asset pricing methodology. We quantify the importance of these factors from an asset pricing perspective by introducing the factor correlation level as a directly accessible proxy of eigenvalues of the correlation matrix. A rational explanation of the remuneration anomaly involves the positive correlation between pay and employee performance.