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Are CEO's paid their marginal product? An empirical analysis of executive compensation and corporate performance

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  • Klinedinst, Mark

Abstract

The theory and reality of chief executive compensation is explored in this paper. The study here uses a panel of data on 143 executives from America’s largest corporations. The results suggest that earlier theoretical expectations and empirical findings of compressed wage scales may not hold when top-level managers are included.

Suggested Citation

  • Klinedinst, Mark, 1991. "Are CEO's paid their marginal product? An empirical analysis of executive compensation and corporate performance," MPRA Paper 36650, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:36650
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    References listed on IDEAS

    as
    1. Wu, De-Min, 1973. "Alternative Tests of Independence Between Stochastic Regressors and Disturbances," Econometrica, Econometric Society, vol. 41(4), pages 733-750, July.
    2. Kiviet, Jan F., 1985. "Model selection test procedures in a single linear equation of a dynamic simultaneous system and their defects in small samples," Journal of Econometrics, Elsevier, vol. 28(3), pages 327-362, June.
    3. Henry G. Manne, 1965. "Mergers and the Market for Corporate Control," Journal of Political Economy, University of Chicago Press, vol. 73(2), pages 110-110.
    4. Frank, Robert H, 1984. "Are Workers Paid Their Marginal Products?," American Economic Review, American Economic Association, vol. 74(4), pages 549-571, September.
    5. MaCurdy, Thomas E & Pencavel, John H, 1986. "Testing between Competing Models of Wage and Employment Determination in Unionized Markets," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 3-39, June.
    6. Henry G. Manne, 1965. "Mergers and the Market for Corporate Control," Journal of Political Economy, University of Chicago Press, vol. 73(4), pages 351-351.
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    More about this item

    Keywords

    compensation; executive; marginal products;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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