1 Another significant aspect of the debate on executive compensation is the level of pay as illustrated in this quote from the Washington Post (April 3, 1997), which said, “Last year was something of a banner year for corporate chief executives: company profits rose faster than sales, stock prices rose faster than profits and executive pay rose faster than everything.” Although the level of pay is an interesting issue to study, it is not one that is included in the current study. I study the use of performance measures and leave the study of the mix and weights of executive compensation to future research.
2 In this sample, the bonus paid to executives is 1.41 times their base salary, on average. Anecdotal evidence also supports this conclusion. Former Chief Executive Officer George Fisher of Eastman Kodak Co. states, “I get no bonus this year. I don’t deserve a bonus this year, and that’s half my pay. That’s pretty significant” (Hirsch, Wall Street Journal, March 17, 1998).
1 Another significant aspect of the debate on executive compensation is the level of pay as illustrated in this quote from the Washington Post (April 3, 1997), which said, “Last year was something of a banner year for corporate chief executives: company profits rose faster than sales, stock prices rose faster than profits and executive pay rose faster than everything.” Although the level of pay is an interesting issue to study, it is not one that is included in the current study. I study the use of performance measures and leave the study of the mix and weights of executive compensation to future research.2 In this sample, the bonus paid to executives is 1.41 times their base salary, on average. Anecdotal evidence also supports this conclusion. Former Chief Executive Officer George Fisher of Eastman Kodak Co. states, “I get no bonus this year. I don’t deserve a bonus this year, and that’s half my pay. That’s pretty significant” (Hirsch, Wall Street Journal, March 17, 1998).
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