Looking at trends in level and structure of executive compensation both internationally and domestically, the paper documents the increase in CEO pay, the fact that US managers are paid more than their international counterparts, the pay-performance sensitivity has increased over the past 25 years. Probably the most complete survey article on the topic, because of its length, this summary will be more a listing of interesting facts than some other summaries. He begins by showing that CEO pay has increased dramatically in the past 30 years. The level of pay has increased substantially.
Larger firms pay their executive more.
Murphy also looks at international data from the 1997 Towers Perrin Worldwide Total Remuneration report. In each of these, there are many interesting facts. For example, most bonus plans are accounting based. These standards can create conflicting incentives. For starters, the options are long term and hence dividends and even volatilities are non constant which makes it difficult to use the Black-Scholes formula.