Abstract
The objective of this article is to examine the relationship between CEOs' payand the stock performance of the Malcolm Baldrige National Quality Award(MBNQA) winning companies. The findings of this study indicate that there is apositive relationship between CEO pay and firm performance for the sample ofMBNQA winning firms. The firm-size elasticity is higher for the MBNQA winnersthan for large American firms reported in previous studies. For the same percentageincrease in the firm's sales, the cash compensation paid to the average CEOof the MBNQA winning firms is higher than that paid to the average CEO of largeAmerican firms. The salary component of compensation has a weaker link toperformance than the bonus component. Bonuses and end-of-year stock optiongrants are the driving forces behind the pay to performance relationship. There isalso some evidence of an operational relative pay component as salary and bonusresponds negatively to changes in the market.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
