Reit Executive Compensation, Performance, and Management Power: Evidence from Panel Data

Abstract

This study focuses on REIT CEO compensation. We utilize five different definitions for CEO compensation: salary, bonus, cash compensation, total compensation, and option awards. To capture the determinants of CEO compensation, we use the following performance measures: three-year stock returns, MVA (market value added), and Tobin's q. We also examine the impact of managerial power on compensation. We utilize a panel data set to capture both the time-series and cross-sectional effects. Our panel data set captures both the time-series and cross-sectional effects. Previous work on REIT executive compensation has chiefly looked at compensation data on cross-sectional basis. We find performance and size do not influence the CEO's salary while, risk, term, title, ownership, and age have significant impacts. Contrary to previous findings and our expectations, bonuses are not influenced by risk, CEO power, or size.

Keywords: REIT, CEO Compensation, Market Value Added