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The issues regarding executive compensation have received extensive media attention. Consider a regression model that links CEO compensation (in $ millions) with the total
The issues regarding executive compensation have received extensive media attention. Consider a regression model that links CEO compensation (in $ millions) with the total assets of the firm (in $ billions) and the firm's industry. Dummy variables are used to represent four industries: Manufacturing Technology d, Manufacturing Other d, Financial Services d3, and Nonfinancial Services d. A portion of the data for 455 CEOS is shown in the accompanying table. Compensation 16.58 Assets 20.92 d d d3 da 1 0 0 26.92 32.66 1 0 0 0 2.30 44.88 0 pictureClick here for the Excel Data File In the following questions, convert assets into $ billions by first dividing all asset values by 1.000. a. Estimate the model: y Bo + 1x Bad Bada Bady, where y and x denote compensation (in $ million) and assets (in $ billion), respectively. The nonfinancial services industry is used for reference. (Negative values should be indicated by a minus sign. Round your answers to 4 decimal places.) 1.4301+ 0.4021 Assets+ -0.0822 d+ -0.2915 -0.8253 d
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