Date of Submission
Campus Only Senior Thesis
Bachelor of Arts
2022 Kyung M Koo
This study examines the impact the effects that executive compensation has on firm performance in Korean conglomerates. The study uses data on ROA, ROE, and total revenue as measures of firm performance on a subset of 39 publicly-traded Korean firms through the period of 2014-2022. Using the data obtained on firm performance as the dependent variable, the study uses a fixed effects regression model with mean differencing using three different factors of individual executive’s compensation at each respective firm to ultimately estimate the relationship between the firm performance measures and executive compensation. The study finds that there is a positive correlation between ROA and ROE on performance-incentive compensation of individual executives. The study also shows that there is no significant correlation between the components of total compensation and base salary with respect to ROA, ROE, or total revenue. Finally, the study shows that there is also no significant correlation between total revenue and any aspect of executive compensation. The study concludes that along with similar research done on the topic of executive compensation, performance-incentive compensation practices are most efficient at increasing firm performance with respect to executive compensation.
Koo, Kyung, "The Effect of CEO Compensation Practices on the Performance of Korean Conglomerates" (2022). CMC Senior Theses. 3176.
This thesis is restricted to the Claremont Colleges current faculty, students, and staff.