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The purpose of this paper is to assess the association between Chief Executive Officer (CEO) tenure, compensation, and firm's performance.

The paper compares the influence firms' performance on CEOs' cash and total compensation based on the length of tenure. It also examines pay–performance relationship for new CEOs vs those serving their last year in such positions.

The firm size appears to be a significant explanatory variable for CEOs' cash and total compensation regardless of CEOs tenure and measure of performance. Additionally, firms' performance is a significant determinant of cash compensation for CEOs during the first three years of their work as CEOs and not significant for those with 15 years or more as the company's CEO. Both market‐based and accounting‐based performance measures are negatively correlated with CEOs' total compensation regardless of length of experience.

This study did not differentiate routine CEO changes, i.e. normal retirement, from the non‐routine ones. Additionally, the results may be limited by the temporal nature of the sample. Future studies dealing with CEO turnover should cover a longer period of CEO' tenure and examine the nature of CEO's dismissal. Such a research design may provide additional insight to the CEO compensation and influence of performance measures in executive contracts.

This research offers some evidence in support of CEO incentives relative to the length of service as the firm's CEO. The findings indicate differences in pay–performance sensitivities on the basis of CEO's tenure. Comparing the pay–performance relationship for individuals serving their first year and those serving their last year as the firm's CEOs, the paper detects statistically significant differences in influence of performance on cash compensation.

This paper aims to examine the impact on executive compensation (both cash and in total) of regulation, size of sales and number of employees, and nature of the business in terms of new‐economy vs traditional.

This study uses the ExecuComp database as the information source. Regression analysis is used to test hypotheses that focus on firm size in terms of sales, market and accounting returns, and the number of firm employees. The sample consists of 455 US firms from 25 industries, and covers the period 1996‐2002.

Firm size and market‐based return are the most significant explanatory variables in affecting executive compensation. More limited support was found for accounting‐based returns, as was changes in the number of employees.

Findings of this study may be limited by the temporal context. Around the turn of this century may have been an unusual time in America's corporate history. The economic outlook of the late 1990s may be fundamentally different from the one facing firms now or in the future. Consequently, future research will be needed to determine to what extent these results can be generalized to periods of different economic prospects.

This study examines the impact of firms' operational characteristic on Chief Executive Officer (CEO) compensation.

This paper aims to examine the synchronous and lagged relationships between CEOs' pay and the performance of a group of public companies that had won a very prestigious award: the Malcolm Baldrige National Quality Award (MBNQA).

This study uses three rates of return to represent firm performance: return on assets, return on equity and holding period return. Regression analysis is used to determine the direction of causality between CEO pay and firm performance and the existence of lagged relationship between them.

The findings indicate the existence of synchronous and lagged relationships between CEO pay and firm performance. However, the direction of causality is mainly from pay to performance, and not vice versa.

The results presented in this paper are limited by the small sample size of MBNQA winning companies. Although the award began in 1988, only a few companies won the award each year and many of them were not public companies. In addition, five companies won the award twice and one company won the award three times, which further reduces the sample size.

This paper finds the existence of synchronous and lagged relationships between CEO pay and firm performance for a group of quality companies.

The relationship between CEO compensation and firm performance is a field of intense theoretical and empirical research. The purpose of this study is to gain additional insights into the nature of this relationship by examining empirically the relatively unexplored areas of its non-linearity. The findings of this study show strong evidence that supports the view that the relationship between executive compensation and firm performance is non-linear and asymmetric. Additionally, the structure of asymmetry is found to be dependent upon the measure of performance. Convexity characterizes the asymmetry of the relationship between executive compensation and market returns, while concavity distinguishes the asymmetry of the relationship between executive compensation and accounting returns.

The aim of this study is to demonstrate suitability of the continuous improvement framework and use of benchmarking method in the context of sports.

This study uses non‐financial performance measures that are indicative of performance and are closely related to the desired outcomes. Use of such measures seems necessary in the sports and appropriate in relation to professional sports organizations' recruiting, attendance, and profit maximizing objectives. Analyses of this study are based on data of National Basketball Association (NBA) games over three basketball seasons.

The results indicated significant correlation between attendance and winning percentages. Furthermore, the results suggest that a team can improve its winning percentages by changes in the roster that help it emulate superior teams. Comparing teams that advanced in a given season and reach the playoffs with those that did not, revealed the more important skill factors for success in the NBA. The results also indicated that some players' skills might be more critical for a given team in reaching the playoffs.

The results presented in this paper are influenced by the NBA's basketball rules. Because basketball rules are not the same for all leagues and such rules change over time, the findings are time‐specific and should be considered in that light. Additionally, the research design used in this study must be modified for other professional sports.

This paper provides an example for application of continuous improvement framework to professional sports.

This paper seeks to present and test a model of the association between dividend payout and executive compensation.

The authors develop a model based on Bhattacharyya whereby managerial quality is unobservable to shareholders, and therefore first‐best contracts are not possible. In the second‐best world, compensation contracts motivate high quality managers to retain and invest firm earnings, while low quality managers are motivated to distribute income to shareholders. These hypotheses arising from the model are tested on data for Canadian firms' dividend payouts over the period 1993‐1995 using tobit regression analyses.

Consistent with the predictions of the Bhattacharyya model, the results show that, ceteris paribus, earnings retention (dividend payout) is positively (negatively) associated with executive compensation. These results hold when payout is defined as common dividends plus common share repurchases.

The Canadian data provide only limited information on the components of executive compensation. A more useful test would be possible with more detailed information on, for example, salary, bonus, and benefits.

Several recent papers have documented an association between dividends and executive compensation. This paper presents and tests a model that provides a potential explanation for this link.

This paper aims to examine the relation between executive compensation, firm size and firm performance on a panel of the so‐called “new economy” firms in the USA over the period 1996‐2002.

The authors use two measures of performance, total shareholder return and return on assets, and concentrate on total CEO compensation, which includes stock option compensation, as equity‐based compensation practices have been prevalent in new economy firms. The estimation process uses both the feasible generalized least squares method of Parks and Kmenta and the panel corrected standard error method of Beck and Katz. These methodologies investigate error structures that do not conform to the classical ordinary least squares assumptions.

The econometric results indicate that estimates on firm size are robust to alternative specifications of the error structures. There is evidence however that the effect of firm size on CEO compensation is more significant after the stock market crash of 2000. The opposite holds true for the estimates on firm performance. In addition, estimates on firm performance are more sensitive to the estimation method and the specification of the error structures.

The research presented in this paper is a first step in the direction of understanding the pay to performance relation in the “new economy” industries in the USA. Additional research is warranted, which should extend both the time series and the cross section aspects of the data.

The paper fills an important gap in the existing literature by providing rigorous econometric evidence on the pay to performance relation in the so‐called “new economy” industries. The evidence provided in this paper is relevant as it complements the findings in the literature on executive compensation in the so‐called “old economy” industries, which typically make up the samples of most previous studies.