Trends in CEO Compensation and Equity Holdings for S&P 1,500 Firms: 1994-2007

Journal of Applied Finance, Forthcoming

38 Pages Posted: 14 Nov 2009

See all articles by Richard A. Lord

Richard A. Lord

Montclair State University - School of Business

Yoshie Saito

Old Dominion University - College of Business & Public Administration

Date Written: November 9, 2009

Abstract

We analyze CEO pay and equity holdings for the S&P 1,500 and broad industry classes. Between 1994 and 2000 real annual compensation doubled, and there was a dramatic shift from salary to option grants. The value and proportion of CEO equity holdings and the price-performance-sensitivity of their portfolios also increased, but, managers held less shares and more options. After the crash of the dot.com bubble at the turn-of-the-century pay fell briefly. But, it then began to trend upward again through 2007. Since 2001 option grants have declined notably, replaced largely by restricted stock grants. In the most recent years CEO option holdings and the price-performance-sensitivity of their equity portfolios have declined to levels far below those in 1994.

Keywords: CEO Compensation, Equity Holding, Price-Performance-Sensitivity, Industry Analysis

JEL Classification: J33, G30, M40

Suggested Citation

Lord, Richard A. and Saito, Yoshie, Trends in CEO Compensation and Equity Holdings for S&P 1,500 Firms: 1994-2007 (November 9, 2009). Journal of Applied Finance, Forthcoming , Available at SSRN: https://ssrn.com/abstract=1505071

Richard A. Lord

Montclair State University - School of Business ( email )

Upper Montclair, NJ 07043
United States
973-655-7448 (Phone)
973-655-7629 (Fax)

Yoshie Saito (Contact Author)

Old Dominion University - College of Business & Public Administration ( email )

Norfolk, VA 23529-0222
United States

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