Abstract

This paper is an empirical analysis of CEO compensation structure and the relationship compensation structure has on the financial performance of the firm. This Independent Study hypothesizes that the greater percentage of incentive based compensation a CEO receives has a positive relationship with firm performance. The model used in this paper is a two stage least square model because economic theory suggests a simultaneous relationship between compensation structure and firm performance. The study uses a sample of CEOs from 325 manufacturing firms from COMPUSTAT. Compensation structure is found to have no statistically significant relationship with firm performance; therefore, the hypothesis of this study is not supported.

Advisor

Sell, John

Second Advisor

Burnell, Barbara

Department

Business Economics

Disciplines

Business Administration, Management, and Operations | Business and Corporate Communications

Publication Date

2014

Degree Granted

Bachelor of Arts

Document Type

Senior Independent Study Thesis

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© Copyright 2014 Scott D. Purcell