Relationship between Ceo Compensation and Firm Performance: Empirical Evidence of Labor Market Norms
Department
Management and Entrepreneurship
Document Type
Article
Publication Date
7-1995
Abstract
The study supports the existence of a relationship between components of CEO compensation and firm performance. On average, the sampled firms can be characterized as having high levels of CEO cash compensation and high ROE, as well as high levels of stock option values and high market returns. These between-firm effects suggest the existence of labor market norms linking executive compensation with firm performance. CEO cash compensation was also strongly influenced by CEO age and firm size.
Journal Title
International Journal of Organizational Analysis
Journal ISSN
1055-3185
Volume
3
Issue
3
First Page
268
Last Page
283
Digital Object Identifier (DOI)
10.1108/eb028832
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