A DEA Approach to Performance Assessment and Compensations of CEO's of U.S. Corporations

James Cordeiro, Joseph Sarkis, and Pracheta Mukherjee

Conference Proceedings of Performance Measurements-Theory and Practice,Cambridge, UK, 1998. pp. 247-254.

We demonstrate the use of Data Envelopment Analysis (DEA) techniques for evaluating the appropriateness of Chief Executive Officer (CEO) compensation in 213 US firms in 16 industries over the 1994-96 period. Our data are analysed using internal industry referents. We also find some support for the proposition firms that pay their CEOs "efficiently" for performance benefit from increased investor oversight and superior governance practices.

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