The management of executive compensation in large, dynamic firms:a ridge regression estimation
Guerard, John B.; Horton, Raymond L.; Guerard, John B.; Lehigh University; Horton, Raymond L.; Lehigh University
Журнал:
Communications in Statistics - Theory and Methods
Дата:
1984
Аннотация:
Economists long have debated the determinants of executive compensation. Recent academic studies have supported both the corporate growth hypothesis and the profit-maximization hypothesis. In the world of business, however, many observers have questioned the link between compensation and performance. The purpose of this study is to select an appropriate sample of peer firms for a rapidly growing chemical firm and to model the executive compensation processa Ridge regression is used to improve parameter stability in the presence of multicollinearity. Both size and performance variables are significant in the executive compensation modeling process.
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