What is theeffect of turnover on executive compensation

he information provided in this thesis focuses on the effect of turnover on the relationship between executive compensation and firm performance for executives of firms listed on the Dutch AEX Stock Exchange and German DAX Stock Exchange. This relation is tested by conducting regression analyses to test four hypotheses. Results show that not only a positive relation between the stock returns and executive compensation, but also the significant influence of stock options on the relation between stock returns and executive compensation. Also, revenues show an even stronger significant effect on executive compensation. Finally, controlling for turnover, results show an even stronger effect of these variables on the executive compensation, indicating that turnover has a significant effect on the relation between executive compensation and firm performance. This thesis contributes to the research conducted so far by providing results on the relationship between executive compensation and firm performance for firms listed on the AEX and DAX. Hereby a comparison is made between board members and CEOs and between different age groups. These results add to the relative scarcity of research for executive compensation on European listed firms. Furthermore, these results can be used to compare the results from studies on executive compensation of U.S. listed firms.