Electric Utility Performance and CEO Compensation

Empirical analysis does not yet converge on a unique set of factors which determine CEO compensation within the electric utility industry. There is some evidence, for example, that compensation and firm size are positively related, and that compensation and accounting profitability are either unrelated or negatively related (Carroll & Ciscel, 1982; Hirschey & Pappas, 1981). On the surface, these findings argue against the need for incentive programs within the utility industry since regulation itself assures adequate firm profitability.