Abstract

Executive compensation has long been a lightening-rod of interest in the popular press and frequently makes the headlines. It seems that everyone has an opinion on the subject, with most demanding an end to inflated compensation packages. Depending on whether you are a member of the C-suite or not will likely skew your opinion on the matter. Given that the CEO is the most visible manifestation of the company to the outside world it is common to fixate on the way in which they are being compensated. However, after all of the research that has been conducted, we are still not sure about what factors determine a business executives’ pay. The present study seeks to add to the extant literature on the subject of CEO compensation by introducing a couple of promising new variables: corporate reputation and sustainability. It is argued that since the CEO is the face of the organization that he/she will be compensated based on how well they manage the firm’s reputation overall and its “environmental footprint” in particular.

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