Profit skimming, asymmetric benchmarking, or the effects of implicit incentives? Evidence from natural disasters

•Compensation of CEOs and other top executives are asymmetrically adjusted for exogenous changes in firm-specific performance.•The change in pay-for-performance sensitivity is greater for favorably rather than adversely affected firms.•Results are stronger in firms with independent boards, new outside CEOs, and younger CEOs, where optimal contracting is more likely.