This paper examines the relationship between CEO compensation structure and firm performance. Relevant theory has us include both cash (salary and bonus) and equity-based (stock options and long-term incentive plans) components of CEO compensation as well as the CEO's risk preference. A theoretical model that identifies the optimal combination of cash and equity is then created. Once the model operationalized the Ordinary Least Squares (OLS) method is used to empirically test our hypothesis. The empirical evidence indicates that salary, bonus, and stock options have significant impacts on firm performance. In contrast performance is not impacted by age or restricted stock options.
Simpson, Scott, "How Ceo Compensation Structure Effects the Stock Price of Real Estate Investment Trusts" (2013). Senior Independent Study Theses. Paper 802.
Bachelor of Arts
Senior Independent Study Thesis
© Copyright 2013 Scott Simpson