Executive compensation is increasingly becoming a target by media, shareholders, and government regulators. Excessive or poorly structured compensation arrangements have been blamed for the U.S. financial crisis of 2008 and it has been questioned why executives were being paid out the bonuses and other benefits even though their companies were losing shareholder value. Agency theory explains part of the problem is due to the separation of management from ownership. This study investigated the relationship between executive compensation and firm performance in the restaurant industry.