Whether CEO stock-based pay effectively enhances firm performancehas been a long time subject of debate for both academics and practitioners.Using a large quantity of U.S. S&P firm data for the years1993–2005, and over time. Based on the robustness checks, we find that the empirical results inthis study are robust with respect to industrial and yearly controls. In addition, the impact of stock-based compensation on firm performanceincreases with firm profitability. This result also holds in the tests of market performance, Tobin’s q, as the dependent variable, or the payfor-performance sensitivity