How closely is CEO compensation tied to performance? An examination of the U.S. restaurant industry

Authors

Michael Dalbor, William F. Harrah College of Hotel Administration University of Nevada Las VegasFollow
Seonghee Oak, North Carolina Central UniversityFollow
Toni Rowe, Ph.D. Candidate, University of Nevada Las VegasFollow

Type of Submission

Refereed Article

Abstract

The purpose of this research is to assess the elasticity of CEO compensation in the U.S. restaurant industry. Using a sample of 30 restaurant firms for the years 1993 through 2006, we find that a 1% increase in current year firm return yields an increase of approximately .43% for salary, bonus and stock options, .20% for salary and bonus and 2.74% for bonus and options. Mergers do not appear to impact CEO compensation significantly. Our findings are within the range found by many previous researchers.

Recommended Citation

Dalbor, Michael; Oak, Seonghee; and Rowe, Toni (2010) "How closely is CEO compensation tied to performance? An examination of the U.S. restaurant industry," Journal of Hospitality Financial Management: Vol. 18: Iss. 2, Article 2.
Available at: https://scholarworks.umass.edu/jhfm/vol18/iss2/2