Evaluating if a Linkage Exists Between CEO Compensation and the Net Income and Stock Price of Their Firm: A Micro Study

Calculating the economic value that a CEO contributes to the value of a corporation is seemingly a moot point. The standard method of evaluation is the use of financial ratios, the value of the firm's stock price and to what degree was the overall objectives of the board of directors were accom...

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Bibliographic Details
Main Author: Keller, Gary F
Format: Conference Proceeding
Language:English
Subjects:
Chief executive officers
Executive compensation
Financial ratios
Revenue
Stock prices
Studies
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Summary:Calculating the economic value that a CEO contributes to the value of a corporation is seemingly a moot point. The standard method of evaluation is the use of financial ratios, the value of the firm's stock price and to what degree was the overall objectives of the board of directors were accomplished. The purpose of this quantitative research project was to investigate to what extent if any a linkage existed between the annual salaries of the CEOs of 48 publically traded firms in the State of Wisconsin, USA and increases/decreases in the price of their corporations' stock price and net revenue. The outcomes from this research showed that there was no statistically significant correlation between the compensation of corporate executives of 48 publically traded firms in the state of Wisconsin and the net incomes and stock prices of their firms in 2008.
ISSN:2251-1970
2251-1989