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

Rebel A. Cole

Florida Atlantic University

Hamid Mehran

Independent

Date Written: May 1, 1991

Abstract

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

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

Rebel A. Cole (Contact Author)

Florida Atlantic University ( email )

College of Business
777 Glades Road
Boca Raton, FL 33431
United States
1-561-297-4969 (Phone)

HOME PAGE: http://rebelcole.com

Hamid Mehran

Independent ( email )

No Address Available

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