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Determining total CEO compensation of selected US public companies

Author

Listed:
  • Matiur Rahman
  • Muhammad Mustafa

Abstract

Purpose - The purpose of this paper is to explore the effects of total assets, stock performances, CEOs’ tenures, ages, and board sizes on total CEO compensations of 249 publicly listed US companies over a nine-year period from 2004-2012. Design/methodology/approach - Pedroni’s panel cointegration, generalized method of moments, and dynamic ordinary least squares methodologies are applied. Findings - All variables are non-stationary in log-levels. The findings show significant positive effects of total assets and stock performances on total CEO compensations. The effects of CEO’s tenure and age as well as board size on total CEO compensation deem negative. However, short-run net interactive feedback effects are generally positive with some exceptions. Research limitations/implications - The above variables matter in rewarding the CEOs. They should be carefully weighed in for proper formulation of CEO compensation policy. Originality/value - This paper applies relatively new econometric tools for a large panel data set. This work considers some new variables for determining CEO compensation in USA. The findings are relatively new with empirical originality.

Suggested Citation

  • Matiur Rahman & Muhammad Mustafa, 2018. "Determining total CEO compensation of selected US public companies," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 14(2), pages 170-187, March.
    • Handle: RePEc:eme:ijmfpp:ijmf-03-2017-0047
    DOI: 10.1108/IJMF-03-2017-0047
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    Citations

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    Cited by:

    1. Clement Olalekan Olaniyi & Olaolu Richard Olayeni, 2020. "A new perspective into the relationship between CEO pay and firm performance: evidence from Nigeria’s listed firms," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 22(2), pages 250-277, December.
    2. Clement Olalekan Olaniyi & Ademola Obafemi Young & Xuan Vinh Vo & Mamdouh Abdulaziz Saleh Al‐Faryan, 2022. "Do institutional framework and its threshold matter in the sensitivity of CEO pay to firm performance? Fresh insights from an emerging market economy," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 3386-3403, December.

    More about this item

    Keywords

    GMM; CEO compensation; DOLS; Panel cointegration; G30; G39;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

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