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Executive Compensation and Performance

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The attached chart shows the growth of the average CEO pay over the period 1990 to 2005. The head of a typical public company made $ 9.7 million dollars in 2011. There are many who see too weak a link between CEO pay and performance. Others object to the gap between executive compensation and the average worker. In your research this week, explore either or both of these issues.

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Solution Summary

This solution explores executive compensation in three steps: the relationship between company size and pay, remuneration for certified vs. non certified CEOs, and the relationship between CEO pay and performance. This solution is 270 words with three references.

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Step 1:
The first study says that there is high relationship (40%) between the company size and CEO pay. According to the study, firm performance only accounts for (5%) variance in total CEO pay. The question it raises is whether there is a high relationship between CEO performance and pay? The source of this article is Journal of Management and is very reliable (a).

Step 2:
CEOs who are certified receive higher remunerations than non certified CEOs. The certified CEOs are ranked on the basis of firm performance These CEOs ...

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