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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 Preview

    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 ...

    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.