Top Executive Rewards and Firm Performance: A Comparison of Japan and the U.S.
This paper compares CEO and top management turnover and its relation to firm performance in the largest companies (by sales) in Japan and the U.S. Japanese top managers are older and have shorter tenures as top managers than their U.S. counterparts. Overall, however, turnover-performance relations are economically and statistically similar: turnover is negatively related to stock, sales, and earnings performance in both countries. Turnover in Japan is particularly sensitive to low earnings. Evidence on executive compensation confirms that Japanese executives own less stock and receive lower cash compensation than U.S. executives. Cash compensation performance relations, nevertheless, are also similar in magnitude to those found in previous work for U.S. executives.
Journal of Political Economy, vol. 102, no. 3, pp. 510-546, (June 1994).