Relationship between Ceo Compensation and Firm Performance: Empirical Evidence of Labor Market Norms
Management and Entrepreneurship
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.
International Journal of Organizational Analysis
Digital Object Identifier (DOI)