The Effect of CEO Age on CEO Compensation Using Accounting Performance as a Benchmark : An Empirical Study on NYSE Index Companies

This research study investigated the effect of CEO age on CEO compensation using accounting performance as an independent variable or benchmark on NYSE companies from 2005 to 2010. The quantitative research and stratified sample methods were selected for this research. The research question for this study was: is there a relationship between CEO compensation and CEO age using accounting performance as a benchmark. It was found that there was a relationship between CEO salary, CEO bonus, CEO total compensation, CEO age, and accounting performance between CEO age groups except for the relationship between: CEO bonus and accounting performance in CEO age group from 40 to 45 years; CEO bonus and accounting performance in CEO age group from 51 to 55 years; and CEO bonus and accounting performance in CEO age group from 61 to 65 years. The correlations between CEO salary, CEO bonus, CEO total compensation, CEO age, return on assets, return on equity, earnings per share, cash flow per share, net profit margin, common stocks outstanding, book and market values of common stocks outstanding were ranged from weak negative to strong positive ratios