Jason R. Barro

Pay, Performance, and Turnover of Bank CEOs

A new data set covers chief executive officers (CEOs) of large commercial banks over the period 1982-87. For newly hired CEOs, the elasticity of pay with respect to assets is about one-third. For continuing CEOs, the change in compensation depends on performance, as measured by stock and accounting returns. The sensitivity of pay to performance diminishes with experience, but the returns are not filtered for peer-group returns. Logit regressions relate the probability of CEO departure to age and performance, as measured by stock returns filtered for peer-group returns; CEO experience does not influence this relationship.

Cohort Turnover and Operational Performance: The July Phenomenon in Teaching Hospitals

We consider the impact of cohort turnover on operational performance in the context of teaching hospitals. Using 12 years of data from a sample of U.S. hospitals, we show that the annual July turnover of residents results in longer lengths of stay, though not a significant change in mortality rates. In major teaching hospitals, we find evidence of an anticipation effect that presents as a gradual decrease in operational performance beginning several months before the actual cohort turnover. We also identify managerial levers for mitigating the decrease in hospital operational performance both at the time of and in the months leading up to the cohort turnover.