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Why Measure the CEO’s Performance

  • C. E. Schneier
  • R. W. Beatty
  • D. G. Shaw

Abstract

A recent survey (Sibson, 1990) of 644 companies found that only 14 percent bother to evaluate their CEO’s performance via any systematic process. Evidence also suggests that, for CEOs, negative consequences (i.e., dismissal, drastically lower pay) associated with poor performance are almost nonexistent (Jensen and Murphy, 1990). Finally, the relationship between CEO pay and company performance “is weakening” (Crystal, 1990; p. 94). Fifty five percent of the variance in CEO pay is not accounted for by company performance, size, business risk, company geographic location, or even CEO tenure.

Keywords

Financial Performance Business Leader Company Performance Harvard Business Review Strategy Execution 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer Science+Business Media New York 1991

Authors and Affiliations

  • C. E. Schneier
    • 1
  • R. W. Beatty
    • 2
  • D. G. Shaw
    • 1
  1. 1.Sibson & Company, Inc.PrincetonUSA
  2. 2.Institute of ManagementRutgers UniversityNew BrunswickUSA

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