Synchronous and lagged relationships between CEO pay and performance of quality companies
Lawrence S. Tai
Managerial Finance, 2008, vol. 34, issue 8, 555-561
Purpose - This paper aims to examine the synchronous and lagged relationships between CEOs' pay and the performance of a group of public companies that had won a very prestigious award: the Malcolm Baldrige National Quality Award (MBNQA). Design/methodology/approach - This study uses three rates of return to represent firm performance: return on assets, return on equity and holding period return. Regression analysis is used to determine the direction of causality between CEO pay and firm performance and the existence of lagged relationship between them. Findings - The findings indicate the existence of synchronous and lagged relationships between CEO pay and firm performance. However, the direction of causality is mainly from pay to performance, and not vice versa. Research limitations/implications - The results presented in this paper are limited by the small sample size of MBNQA winning companies. Although the award began in 1988, only a few companies won the award each year and many of them were not public companies. In addition, five companies won the award twice and one company won the award three times, which further reduces the sample size. Originality/value - This paper finds the existence of synchronous and lagged relationships between CEO pay and firm performance for a group of quality companies.
Keywords: Chief executives; Pay; Performance measures; Public sector organizations; Quality (search for similar items in EconPapers)
References: Add references at CitEc
Citations Track citations by RSS feed
Downloads: (external link)
http://www.emeraldinsight.com/10.1108/030743508108 ... RePEc&WT.mc_id=RePEc (text/html)
Access to full text is restricted to subscribers
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eme:mfipps:v:34:y:2008:i:8:p:555-561
Ordering information: This journal article can be ordered from
Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
http://emeraldgroupp ... s/journals.htm?id=mf
Access Statistics for this article
Managerial Finance is currently edited by Professor Don T Johnson
More articles in Managerial Finance from Emerald Group Publishing
Series data maintained by Virginia Chapman ().