FAIR VALUE, FIRM PERFORMANCE RATIOS AND CEO COMPENSATION : An Investigation of the Association between Use of Fair Value and Firm Performance Ratios and its effect over CEO Compensation, in Sweden

Abstract: The purpose of this study is to test the relation, if any, between use of fair value measurement and reported performance ratios of the firms and finally its effect on CEO compensation in Sweden. This research aims to contribute knowledge of decision makers about the performance-pay link in Sweden by comparing the changes of CEO compensations across the years, before and after the use of fair value method. In this sense, firms divided in two models of ownership structure: firms with family concentration and firms with dispersed ownership structure. This paper intent to contribute the explanations of existing researches from the USA and China about exponential increase in CEO compensation after the use of fair value method, with the data of Swedish listed companies. The data set of this study was highly dependent of the accessibility of information. In this sense, this research can be contributed with different data set, with more detailed scrutinise of data and in a longer research period.