Corporate Performance and the Chief Executive Officer`s Compensation in the Service Industry

Abstract

This study examines the relationship between corporate performance and the CEO compensation. Data were collected from www.sedar.com (the official site that provides access to most public securities documents and information filed by public companies and investment funds with the Canadian Securities Administrators (CSA) in the SEDAR filing system), www.sec.gov/edgar.shtml, and www.hoovers.com to examine the relationship between corporate performance and the CEO compensation. Results suggest that CEO compensation is the function of net profit margin. This paper offers useful insights for the service industry owner/operators based on empirical evidence.