Using a pooled cross-sectional, time-series regression approach, this study investigates the effects of selected corporate governance mechanisms, ownership structure, firm risk, and strategic variables on CEO cash compensation, and separately, total compensation in a panel of 222 US firms over the 1992-1995 period, while controlling for the impacts of CEO tenure, firm size, performance, risk and diversification. The hypotheses were tested using pooled time-series cross-sectional regression analysis. Contrary to expectations, the outside director ratio had a strong positive impact on the cash compensation component, but none on total compensation. Inside director ownership had a negative impact on CEO cash compensation.Outside pressuremeasured as the number ofblockholdersholding more than 5% of the outstanding stock, had a negative effect on cash compensation. However, this variable did not affect total pay. The level of firmdiversification increasedthe cash component of CEO pay. Total risk positively influenced CEO cash compensation.
"Beyond Pay for Performance: A Panel Study of the Determinants of CEO Compensation,"
American Business Review: Vol. 21:
1, Article 2.
Available at: https://digitalcommons.newhaven.edu/americanbusinessreview/vol21/iss1/2