Recent research on executive compensation studies attempts to decouple the executive compensation and firm performance relationship. This study intends to clarify the conflicting results reported by previous researchers by introducing a new theoretical perspective. A new methodological technique to explain the controversial empirical evidences is also employed. Different from most researchers who treated sales as a firm size indicator in the relationship between compensation and performance, we demonstrate in this paper that sales is more related to performance than to firm size in the compensation context by using structural equation modelling. Our results show that performance mediates the relationship between firm size and executive compensation.
|Original language||English (US)|
|Number of pages||17|
|Journal||International Journal of Human Resources Development and Management|
|State||Published - 2009|
- Executive compensation
- Structural equation modelling