The price of change: The role of CEO compensation in strategic variation and deviation from industry strategy norms

This research rests the proposition that changes in CEO pay will be reflected in strategic change-viewed as variation in firm strategy and deviation from industry strategic norms. Changes in total CEO pay, long-term pay, and long-term pay structure were found to affect strategic change in a sample of large U.S. firms. However, the effects of pay on change were positive when firm performance was low; the relationships were negative among the highest performing firms. (C) 2000 Elsevier Science Inc. All rights reserved.