Empirically, the relationship between CEO performance (measured in terms of share price) and CEO compensation is
A) large and positive.
B) small and positive.
C) nonexistent.
D) small and negative.
E) large and negative.

Question

Quizplus · Accepted Answer

Empirical studies generally find a small and positive relationship between CEO performance (often measured in terms of share price or company profitability) and CEO compensation. This suggests that as a company performs better, CEO compensation tends to increase, but the magnitude of this increase is relatively modest.

Empirically, the Relationship Between CEO Performance (Measured in Terms of Share