METHOD
Data
The population for this study included the largest U.S.
industrial and service companies. The initials ample
consisted of 669 firms listed in the 1972 Forbes 500 and
Fortune 500 listings. The year 1972 was chosen to
approximatet he onset of LTIP adoption (Larcker, 1983;
Jarrell, 1993), as explained in more detail below. Firms were
excluded from the final sample if proxy statements were
unavailableo r compensation informationw as incomplete or
if firms experienced CEO succession during the year of
adoption or the following year. The final sample included 570
firms. Two-sample t-tests revealed no significant differences
in size, measured as sales and number of employees, or
performance, measured as return on assets and total stock
returns, between the initial population and the final sample.