This study explores whether firm size moderates the relationship between corporate diversification and CEO compensation. A sample of 2,448 CEO compensations across 1,622 firms from 1997 to 2002 was used to test several hypotheses. Corporate diversification was divided into two categories (international diversification and industry diversification) and firm size was defined using total assets. This study uses firm size as the moderator to test whether firm size influences the relationship between international diversification and CEO compensation. This study found new evidence that firm size moderate the relationship between both international diversification and industrial diversification and CEO total compensation. The result shows that firm size significantly and positively influences the relationship between International diversification and CEO compensation. Furthermore, the finding also shows that firm size significantly and negatively influences the relationship between industrial diversification and CEO compensation.

The primary purpose of this study is to explore the determinants of CEO bonus compensation: to examine CEO bonuses and to explore whether or not the independent variables are associated with CEO bonus compensation. For the purposes of this study, a sample of 2,448 CEO bonus compensations across 1,622 firms from 1997 to 2002 was used to test several hypotheses. The dependent variable in this model is the CEO bonus compensation. Bonus is the dollar value of the bonus (cash and non-cash) earned by the named executive officer during the fiscal year. Corporate diversification was divided into two categories; international diversification and industry diversification. Firm performance is measured by both Market-based, Performance (RET) and Accounting-based, Performance (ACE). The results show that the higher the degree of international diversification, and the higher accounting earnings performance, the more CEOs receive in bonuses. In addition, this study found that international diversification is associated with a greater use of bonuses and with a greater reliance on accounting-based, rather than market-based measures of firm performance. The results also demonstrated that CEOs in firms with more investment opportunities will receive higher bonuses than CEOs in firms with fewer investment opportunities and CEOs in larger firms will receive higher bonuses than CEOs in smaller firms.

This study explores whether firm performance moderates the relationshipbetween corporate diversification and CEO compensation. A sample of 2,448 CEOcompensations across 1,622 firms from 1997 to 2002 was used to test several hypotheses.Corporate diversification was divided into two categories (international and industry) andfirm performance was defined using both market-based and accounting-based measures.For the relationship between international diversification and CEO compensation, ourresults indicate that both market-based and accounting-based firm performance had asignificant negative effect on that relationship. Furthermore, accounting-based firmperformance was a better predictor of international diversification and CEOcompensation than market-based firm performance. For the relationship betweenindustry diversification and CEO compensation, however, our results show that onlymarket-based firm performance had a significant negative influence whereas accountingbased firm performance did not have any significant influence.