BIROn - Birkbeck Institutional Research Online

    CEO pay, shareholder returns, and accounting profits

    Guy, Frederick (2000) CEO pay, shareholder returns, and accounting profits. International Journal of the Economics of Business 7 (3), pp. 263-274. ISSN 1357-1516.

    [img]
    Preview
    Text
    480.pdf

    Download (219kB) | Preview

    Abstract

    We assess the impact on CEO pay (including salary, cash bonus, and benefits in kind) of changes in both accounting and shareholder returns in 99 British companies in the years 1972-89. After correcting for heterogeneity biases inherent in the standard specifications of the problem, we find a strong positive relationship between CEO pay and within-company changes in shareholder returns, and no statistically significant relationship between CEO pay and within-company changes in accounting returns. Differences between firms in long-term average profitability do appear to have a substantial effect on CEO pay, while differences between firms in shareholder returns add nothing to the within-firm pay dynamics.These findings call into question the rationale for explicitly share-based incentive schemes.

    Metadata

    Item Type: Article
    Keyword(s) / Subject(s): accounting, chief executive officers, incentives in industry, stocks, wages, CEO pay, random coefficients
    School: Birkbeck Schools and Departments > School of Business, Economics & Informatics > Management
    Research Centre: Innovation Management Research, Birkbeck Centre for
    Depositing User: Administrator
    Date Deposited: 21 Mar 2007
    Last Modified: 06 Dec 2016 10:11
    URI: http://eprints.bbk.ac.uk/id/eprint/480

    Statistics

    Downloads
    Activity Overview
    623Downloads
    607Hits

    Additional statistics are available via IRStats2.

    Archive Staff Only (login required)

    Edit/View Item Edit/View Item