Abstract
In an attempt to find out how the casino industry may improve its executive compensation structure to enhance shareholder wealth, this article examines determinants of cash compensation of chief executive officers (CEO) of casino firms. Based on the data of publicly traded U.S. casino companies from 1995 through 1999, this study found CEO cash compensation positively correlated with profitability, firm size, debt leverage, and stock options but negatively associated with assets turnover. The results suggest that to better align CEO incentives with shareholder interests and thus maximize shareholder wealth, casino firms should tie executive pay to revenue efficiency and make stock performance a significant factor in determining executive pay.
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