IDEAS home Printed from https://ideas.repec.org/p/sip/dpaper/07-028.html
   My bibliography  Save this paper

CEO Compensation for Major US Companies in 2006

Author

Listed:
  • Samia El Baroudy

    () (Stanford University)

  • Ruth Levine

    () (Stanford University)

  • Ling Shao

    () (Stanford University)

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.

Suggested Citation

  • Samia El Baroudy & Ruth Levine & Ling Shao, 2008. "CEO Compensation for Major US Companies in 2006," Discussion Papers 07-028, Stanford Institute for Economic Policy Research.
  • Handle: RePEc:sip:dpaper:07-028
    as

    Download full text from publisher

    File URL: http://www-siepr.stanford.edu/repec/sip/07-028.pdf
    Download Restriction: no

    More about this item

    Keywords

    executive compensation; severance packages; CEO pay; CEO performance;

    JEL classification:

    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

    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:sip:dpaper:07-028. 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: (Anne Shor). General contact details of provider: http://edirc.repec.org/data/cestaus.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.

    We have no references for this item. You can help adding them by using 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.