Executive Compensation and Corporate Performance: Evidence from Thrift Institutions
- 1 May 1991
- preprint
- Published by Elsevier in SSRN Electronic Journal
Abstract
This study uses data from thrift institutions to provide new evidence on the relation between executive pay and firm performance. We find a positive and statistically significant relation between CEO pay and firm performance as measured by both return on assets and return on equity. Moreover, the relation is robust across alternative specifications of the model. This evidence is consistent with the view that a firm's executive compensation policy is designed to reduce the agency costs between managers and shareholders.Keywords
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