Abstract
In an attempt to address the growing gap between chief executive officer (CEO) remuneration and that of
the general worker, reign in rising CEO remuneration, and justify the portion of long-term incentive pay that
makes up the bulk of CEO remuneration, shareholders and other stakeholders are trying to find definitive
factors that will link CEO remuneration to company performance. Finding this link has become central to all
executive remuneration issues. The results of the studies linking CEO remuneration to company
performance are varied and inconclusive, particularly in South Africa.
The reason for this is that previous studies have not looked at whether the company performance
measures chosen have definite relationships with CEO remuneration in each industry.
This study investigated eleven financial indicators of company performance to determine which of them
have significant and positive relationships to CEO remuneration in different industries in South Africa. 254
South African listed companies, spread over 5 industries, were analysed for the period 2008 to 2012 using
panel data analysis and statistical tests.
The results were conclusive, finding performance metrics that had a positive and significant relationship to
CEO remuneration in 4 of the 5 industries investigated, as well as over the aggregate of all the industries.