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EXECUTIVE PAY DETERMINATION AND FIRM PERFORMANCE—EMPIRICAL EVIDENCE FROM A COMPRESSED WAGE ENVIRONMENT *
Author(s) -
DALEOLSEN HARALD
Publication year - 2012
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/j.1467-9957.2011.02225.x
Subject(s) - remuneration , executive compensation , productivity , earnings , wage , norwegian , labour economics , performance related pay , compensation (psychology) , empirical evidence , business , economics , pay for performance , accounting , microeconomics , finance , incentive , psychology , linguistics , philosophy , epistemology , psychoanalysis , macroeconomics
Using representative register and questionnaire data on Norwegian firms and workplaces we study the relationship between firm performance, CEO compensation schemes and the level of executive compensation. On average no relationship is found between executive performance pay and firm productivity. These relationships vary between industries, and CEO performance pay is strongly associated with high‐productivity manufacturing firms. On average CEOs receive higher earnings under performance pay than under fixed pay, even controlled for productivity and industry differences. Thus the earnings of executives appear more strongly related to the choice of executive remuneration scheme than that of the performance of firms.