How much does performance matter? A meta-analysis of CEO pay studies

Henry L. Tosi, Steve Werner, Jeffrey P. Katz, Luis Gomez-Mejia

Research output: Contribution to journalArticlepeer-review

594 Scopus citations


Through a meta-analytic review of the empirical literature on the determinants of CEO pay, this study tests the hypothesized relationships between firm size, performance, and CEO pay. We show that firm size accounts for more than 40% of the variance in total CEO pay, while firm performance accounts for less than 5% of the variance. We also show that pay sensitivities are relatively similar for both changes in size (5% of the explained variance in pay) and changes in financial performance (4% of the explained variance in pay). The meta-analysis also suggests that moderator variables may play an important role, but we were unable to test for this.

Original languageEnglish (US)
Pages (from-to)301-339
Number of pages39
JournalJournal of Management
Issue number2
StatePublished - 2000

ASJC Scopus subject areas

  • Finance
  • Strategy and Management


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