The process of selecting factors that predict executive remuneration

Abstract

In this article I seek to determine those organizational and individual factors which best predict executive remuneration. I describe how a pilot study was used to test a variety of factors and to eliminate those which were clearly poor predictors of executive remuneration. Applying multiple regression analysis to the data submitted to an executive salary survey, two sets of factors were obtained. Certain factors individually proved to be better predictors, but it was found that a combination of factors yielded the highest coefficients of determination. The weighting of each factor was then determined in order to derive a market pricing model for executive remuneration.