← Search

How Much Does Performance Matter? A Meta-Analysis of CEO Pay Studies

Henry L. Tosi¹; Steve Werner²; Jeffrey P. Katz³; Luis R. Gomez-Mejia⁴

¹ University of Florida and SDA Bocconi · ² University of Houston · ³ Kansas State University · ⁴ Arizona State University

Through a meta-analytic review of the empirical literature on the determinants of CEO pay, this study tests the hypothesized relationships between firm size, performance, and CEO pay. We show that firm size accounts for more than 40% of the variance in total CEO pay, while firm performance accounts for less than 5% of the variance. We also show that pay sensitivities are relatively similar for both changes in size (5% of the explained variance in pay) and changes in financial performance (4% of the explained variance in pay). The meta-analysis also suggests that moderator variables may play an important role, but we were unable to test for this.

DOI

10.1177/014920630002600207

Volume

26 (2)

Pages

301-339

Language

en

Export

BibTeX

Sources

crossref