CEO Compensation for Major US Companies in 2006

Samia El Baroudy (), Ruth Levine () and Ling Shao ()
Additional contact information
Samia El Baroudy: Stanford University
Ruth Levine: Stanford University
Ling Shao: Stanford University

No 07-028, Discussion Papers from Stanford Institute for Economic Policy Research

Abstract: The purpose of this paper is to update the empirical investigation into pay-setting practices of major U.S. companies. While it enters the debate on the determinants of CEO compensation, our approach is explanatory rather than prescriptive. Our empirical analysis is based on a sample of 236 major U.S. firms from the 2006 WSJ/Mercer CEO Compensation Survey. We run a series of cross-sectional regressions that consider the effects of performance indicators on total direct compensation and the cash bonus. We also test the effects on non-performance variables, which represent potential agency problems involved with CEO compensation. We find that CEO compensation is tied to firm performance, but whether the link has increased or decreased in strength over time remains unclear. We also determine that non-performance related factors contribute significantly to CEO compensation: CEOs who are also chairmen of the board make 35% more than non-chairmen, and companies that grant more stock options tend to have 30% lower dividend yields.

Keywords: executive compensation; severance packages; CEO pay; CEO performance (search for similar items in EconPapers)
JEL-codes: M52 (search for similar items in EconPapers)
Date: 2008-01
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www-siepr.stanford.edu/repec/sip/07-028.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to www-siepr.stanford.edu:80 (nodename nor servname provided, or not known)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sip:dpaper:07-028

Access Statistics for this paper

More papers in Discussion Papers from Stanford Institute for Economic Policy Research Contact information at EDIRC.
Bibliographic data for series maintained by Anne Shor ( this e-mail address is bad, please contact ).