IDEAS home Printed from https://ideas.repec.org/a/ags/reapec/50158.html
   My bibliography  Save this article

Using Panel Data to Estimate the Economic Determinants of CEO Compensation

Author

Listed:
  • Gius, Mark P.

Abstract

The present study uses the latest data available from ExecuComp in order to estimate an economic model of the determinants of CEO compensation. Examining 975 CEO’s over the period 1992-2002, the present study finds that experience had a positive effect on CEO pay, while industry specific dummy variables had little, if any, effect on compensation. Performance measures, such as net income per sales and return on equity, had very little effect on CEO pay. The results of the present study corroborate many anecdotal assertions that CEO pay is not linked to firm performance. However, the results of the present study indicate that experience is one of the most important factors affecting CEO compensation. Gender was not found to play a significant role; however, this result may be due to the fact that less than 2% of the CEOs in the sample used in the present study were women. These results suggest that years of experience may actually play more of role in the determination of CEO pay than how well the CEO manages the firm.

Suggested Citation

  • Gius, Mark P., 2007. "Using Panel Data to Estimate the Economic Determinants of CEO Compensation," Review of Applied Economics, Review of Applied Economics, vol. 3(1-2).
  • Handle: RePEc:ags:reapec:50158
    as

    Download full text from publisher

    File URL: http://purl.umn.edu/50158
    Download Restriction: no

    References listed on IDEAS

    as
    1. Jensen, Michael C & Murphy, Kevin J, 1990. "Performance Pay and Top-Management Incentives," Journal of Political Economy, University of Chicago Press, vol. 98(2), pages 225-264, April.
    2. Nikos Vafeas, 2003. "Further Evidence on Compensation Committee Composition as a Determinant of CEO Compensation," Financial Management, Financial Management Association, vol. 32(2), Summer.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    CEO; compensation; Financial Economics; J33;

    JEL classification:

    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:reapec:50158. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search). General contact details of provider: http://www.lincoln.ac.nz/story11874.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.