Abstract
Abstract
This study statistically examines the key determinants of compensation for CEOs in the pharmaceutical industry. Size, as measured by the log of the company's market value, provides the greatest explanatory power, in addition to the value of the CEO's holdings in the company and the composition of those holdings. The absolute number of employees provides a better explanation for smaller companies in the industry. An interesting relationship appears between the CEO's wealth and the total return of the company, perhaps suggesting that stock options provide some incentive for the CEO to maximize his total wealth by improving the company's market value and the stockholders' total return.
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