Article ID Journal Published Year Pages File Type
1017233 Journal of Business Research 2015 7 Pages PDF
Abstract

Building upon labor market theory, we investigate whether under- or over-investing in CEOs (i.e., strategically paying above or below a CEO's predicted labor market compensation rate) affects long-term firm value and whether there are diminishing returns to these investments. Our results indicate that investments in CEOs are positively related to long-term firm value and that the relationship diminishes, eventually becoming negative, as investments increase.

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Social Sciences and Humanities Business, Management and Accounting Business and International Management
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Consequences of deviating from predicted CEO labor market compensation on long-term firm value
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