Abstract
This paper is an investigation of the pay-for-performance link in executive compensation. In particular we document main issues in the pay-performance debate and explain practical issues in setting pay as well as data issues including how pay is disclosed and how that has changed over time. We also provide a summary of the state of CEO pay levels and pay mix in 2009 using a sample of over 2,000 companies and describe main data sources for researchers. We also investigate what we believe to be at the root of fundamental confusion in the literature across disciplines – methodological issues. In exploring methodological issues, we focus on empirical specifications, causality, fixed-effects, first- differencing and instrumental variables issues. We then discuss two important but not yet well explored areas; international issues and compensation in nonprofits. We conclude by examining a series of research areas where further work can be done, within and across disciplines.
Document Type
Restricted Article: Campus only access
Publication Date
2-26-2010
Publisher Statement
Copyright © 2010, Cornell University.
The definitive version is available at: https://ecommons.cornell.edu/items/9f00f420-1a42-4b34-93b3-d79496475884
Recommended Citation
“Executive Pay and Firm Performance: Methodological Considerations and Future Directions,” (Kevin Hallock, Beth Florin and Douglas Webber), Research in Personnel and Human Resources Management, 2010.
