Executive Compensation

Paper Summary:

This study attempts to discern the statistical connection between the total compensation of American chief executive officers and company profits as defined by company net income. The data included for the study concerns the fiscal year 2002 and 2003. The study finds that that there is no statistically significant correlation relationship between chief executive officer compensation and company net income.

Table of Contents
List of Figures
List of Tables
List of Abbreviations
Introduction
Review of the Literature
Methodology
Findings
Summary, Conclusions and Recommendations

From the Paper:

"The chief executive officer in an organization can broadly define the individual who "plans and directs all aspects of an organization's policies, objectives, and initiatives" ("Chief Executive Officer"). When these individuals take control of the helms of large corporations, their reputations, and salaries often mirror those of highly successful professional athletes or Hollywood movie stars. With millions (and sometimes billions) of corporate dollars at stake, chief executive officers face massive pressure and unwavering scrutiny by shareholders, financial institutions, and the media. False steps, poor business decisions, scandal, and the no-fault peril of the American marketplace threaten the tenures of all chief executive officers, regardless of past performance. Current surveys of chief executive officers reflect that nearly 50 percent of all CEOs are removed from their current position within five years of accepting their positions ("No Walk in the Park"). Furthermore, the job is grueling, and there is little opportunity for vacation, personal, or family time ("No Walk in the Park")."

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