EconPapers    
Economics at your fingertips  
 

Synchronous and lagged relationships between CEO pay and performance of quality companies

Lawrence S. Tai

Managerial Finance, 2008, vol. 34, issue 8, 555-561

Abstract: 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)
Date: 2008
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

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: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 ().

 
Page updated 2017-10-13
Handle: RePEc:eme:mfipps:v:34:y:2008:i:8:p:555-561