Executive Compensation: characteristics and impacts on company strategies and results

Zariyat Shiraliyeva

Executive Compensation: characteristics and impacts on company strategies and results.

Rel. Riccardo Calcagno. Politecnico di Torino, Master of science program in Engineering And Management, 2021

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Abstract

This paper studies the relationship between Chief Executive Officer (CEO) pay and company performance in the U.S. stock market S&P 500. Executive compensation has significantly increased over the past several decades, and it has been in heated debates in both the academic and corporate world. This thesis aims to look into the impact of CEO pay on the firm's stock performance in the S&P 500 by analyzing CEO pay data of the Compustat, Execucomp database, and relevant financial data of the companies. The paper aims to find how top executive pay structure, salary, bonus, and other forms of pay are related to company performance.

The study finds out that the company's size appears to be the most important factor in impacting the level of total CEO salary, besides other significant factors, such as tenure and age.