CEO Compensation and Firm Performance-Evidence from Non-Financial Sector
Keywords:
CEO compensation, Firm performance, ROA and ROEAbstract
This study is conducted to bridge this gap and highlight the position of CEO in relevance to corporate governance. The main purpose of this research was to check the effect of CEO characteristics on firm performance i.e. CEO compensation was taken as independent variable whereas firm performance was considered as a dependent variable. The controlled variables assumed in the model were board size, nonexecutive directors, leverage, firm age and firm size. We have collected our data from the 72 companies of nonfinancial sector listed in Karachi Stock Exchange from 2006 to 2013. Regression and Correlation techniques were used to test the relationship between CEO compensation and firm performance. Our findings showed that there is a positive and significant relationship between CEO compensation and firm performance in case of ROA and Tobin’s q as a measure of firm performance whereas CEO compensation is negatively and significantly related with the firm performance in case of ROA
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