Research on the Relationship between CEO Compensation and Company Performance

This study aims to analyze the relationship between the CEO compensation (in cash or in equity based) and company performance (return on asset, return on equity and earnings per share) of 1662 companies from ExeuComp database in 2012. I use a simple linear regression and determine a significant positive correlation, which is consistent with the previous done studies. In the meantime, I also find that there is impact of other factors such as firm size and debt ratio on the pay-performance relationship.