Top Executive Rewards and Firm Performance: A Comparison of Japan and the U.S
Posted: 24 Oct 1999
Date Written: January 1994
This paper studies top executive turnover and compensation, and their relation to firm performance in the largest Japanese and U.S. companies. Japanese executive turnover and compensation are related to earnings, stock return, and sales performance measures. The fortunes of Japanese top executives, therefore, are positively correlated with stock performance and with current cash flows (or with factors contributing to such performance). The relations for the Japanese executives are generally economically and statistically similar to those for their U.S. counterparts, particularly for sales growth. There is some evidence, however, that the fortunes of Japanese executives are more sensitive to low income and less sensitive to stock returns than those of U.S. executives.
JEL Classification: G3
Suggested Citation: Suggested Citation