Executive Compensation and Corporate Performance: Evidence from Thrift Institutions

Cole, Rebel A.; Mehran, Hamid

doi:10.2139/ssrn.1307382

Download This Paper

Open PDF in Browser

Add Paper to My Library

Executive Compensation and Corporate Performance: Evidence from Thrift Institutions

Rebuilding Banking: Proceedings of the 27th Annual Conference on Bank Structure and Performance, pp. 227-247, 1991

23 Pages Posted: 26 Nov 2008

See all articles by Rebel A. Cole

This study uses data from thrift institutions to provide new evidence on the relation between executive pay and firm performance. We find a positive and statistically significant relation between CEO pay and firm performance as measured by both return on assets and return on equity. Moreover, the relation is robust across alternative specifications of the model. This evidence is consistent with the view that a firm's executive compensation policy is designed to reduce the agency costs between managers and shareholders.

Keywords: agency costs, CEO pay, compensation, deposit insurance, executive compensation, thrift

JEL Classification: E53, G18, G21, G28, G34, J33

Suggested Citation: Suggested Citation

Cole, Rebel A. and Mehran, Hamid, Executive Compensation and Corporate Performance: Evidence from Thrift Institutions (May 1, 1991). Rebuilding Banking: Proceedings of the 27th Annual Conference on Bank Structure and Performance, pp. 227-247, 1991, Available at SSRN: https://ssrn.com/abstract=1307382 or http://dx.doi.org/10.2139/ssrn.1307382