Authors: Mina Glambosky; Surendranath Rakesh Jory; Thanh Ngo
Addresses: Brooklyn College – CUNY, Brooklyn, NY 11210, USA ' University of Southampton, SO17 1BJ, UK ' East Carolina University, Greenville, NC 27858-4353, USA
Abstract: Nominal salary is a symbolic amount that does not represent economically meaningful compensation. In this study, we document that CEO nominal salary is positively related to a firms' operating and stock performance. Our results stay robust when we address endogeneity issues using the Heckman self-selection two-stage regression and propensity score matching approach. The findings of our study render important implications about CEO compensation structure and how it can align manager incentives with shareholder wealth.
Keywords: CEO nominal salary; operating performance; stock performance.
International Journal of Corporate Governance, 2021 Vol.12 No.3/4, pp.229 - 253
Accepted: 13 Sep 2021
Published online: 24 Feb 2022 *