CEO Compensation and Company Performance

This paper examines the relationship of CEO pay and company performance for 280 firms listed on the New York Stock Exchange for a period from2006 through 2009. The time frame of the study is a period after the adoption of the Sarbanes Oxley Act and after the SEC approval of thecorporate governance rules affecting executive pay for New York Stock Exchange companies. I find there to be a positive and significantrelationship between total CEO compensation and company performance measured by return on equity. The size of the firm appears to be themost significant factor in determining the level of total CEO compensation, according to the results, and the tenure of the chief executive officer isanother significant variable.