The IMplications of Firm and INdividual Characteristics on CEO Pay
By: McNIGHT, Phillip; TOMKINS, Cyril
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ArticlePublisher: Oxford : Elsevier, February 2004European Management Journal 22, 1, p. 27-40Abstract: This study examines boththe direct and indirect effects of chief executive officer terure and age on CEO pay in UK organizations. It was found the the positive relatioship between shareholder return and increases in the value of executive options held decreases with CEO tenure. Morevoer, the positive association between changes in salary and sales was found to increase with CEO tenure. CEO age, on the other hand, weakened the relationship between the level in salary and size of the organization. Several new methodological issues relating to research on executive pay are also raised. One finding was that the study of these relationships might be better pursed through the use of non-linear functions as CEO influence over the pay setting process may not become significant until about the sixth year of tenure. These findings have implications for futher research relating to executive pay and to the corporate governance process
This study examines boththe direct and indirect effects of chief executive officer terure and age on CEO pay in UK organizations. It was found the the positive relatioship between shareholder return and increases in the value of executive options held decreases with CEO tenure. Morevoer, the positive association between changes in salary and sales was found to increase with CEO tenure. CEO age, on the other hand, weakened the relationship between the level in salary and size of the organization. Several new methodological issues relating to research on executive pay are also raised. One finding was that the study of these relationships might be better pursed through the use of non-linear functions as CEO influence over the pay setting process may not become significant until about the sixth year of tenure. These findings have implications for futher research relating to executive pay and to the corporate governance process
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