CEO Compensation and Firm Performance: A Study on the Moderating Roles of CEO Origin and Firm Size
Bibliographic record
Abstract
This study delves into the critical role of Chief Executive Officers (CEOs) in organizational performance, with a specific focus on the impact of CEO origin (internal vs. external) on the relationship between CEO compensation and firm financial performance. CEOs often draw significant attention and controversy, especially regarding their compensation and the succession process. Our research investigates these aspects, contributing novel insights to both the Resource-Based View (RBV) and CEO succession literature. We analyze a comprehensive dataset of publicly traded companies in the US and Canada, examining the relationship between CEO compensation and firm performance moderated by CEO origin. The study reveals that internally promoted CEOs, compared to externally hired counterparts, differently influence the relationship between CEO compensation and firm performance. Our findings indicate that internally promoted CEOs strengthen the positive relationship between compensation and ROA. In contrast, externally recruited CEOs present a different scenario, often involving higher compensation but with a less straightforward impact on firm performance. We also explore how firm size moderates this relationship, uncovering complex dynamics that challenge traditional assumptions in strategic management.
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How this classification was reachedexpand
Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.001 | 0.000 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.000 | 0.000 |
| Science and technology studies | 0.000 | 0.000 |
| Scholarly communication | 0.000 | 0.001 |
| Open science | 0.000 | 0.000 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.000 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one teacher head, not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".