THE ROLE OF CEO COMPENSATION IN STRATEGIC VARIATION
AND DEVIATION FROM INDUSTRY STRATEGY NORMS
AbstractThis research tests the proposition that changes in CEO pay will be reflected in strategic change -- viewed as variation in firm strategy and deviation from industry strategic norms. Changes in total CEO pay, long-term pay, and long-term pay structure were found to affect strategic change in a sample of large US firms. However, the effects of pay on change were positive when firm performance was low; the relationships were negative among the highest performing firms.