Table 10

Impact of CEO components (salary, perquisites, and stock options) on the risk of financial distress

VariablesZscoreZscoreZscoreZM scoreZM scoreZM score
Zscore (−1)0.559***0.563***0.574***   
(0.032)(0.032)(0.032)   
ZMscore (−1)   0.629***0.630***0.623***
   (0.030)(0.030)(0.030)
Salary0.057***  −0.292**  
(0.000)  (0.000)  
Perquisites 0.019**  −0.082* 
 (0.000)  (0.000) 
Stock_opt  0.081  −0.002
  (0.009)  (0.011)
Fsize0.929***0.662***0.261−0.135−0.182*−0.241***
(0.282)(0.142)(0.129)(0.151)(0.112)(0.102)
Lev−1.614***−1.772***−1.672***2.172***2.292***2.257***
(0.109)(0.192)(0.129)(0.091)(0.104)(0.118)
Tan−0.629**−0.715**−0.662**0.492***0.431***0.319***
(0.281)(0.202)(0.223)(0.132)(0.138)(0.135)
Slack3.575***3.102***3.452***−1.178***−1.182***−1.139***
(0.382)(0.353)(0.281)(0.242)(0.241)(0.242)
Sgth0.0182**0.012**0.010**−0.002−0.002−0.002
(0.051)(0.013)(0.011)(0.010)(0.013)(0.010)
Constant9.170***8.216***5.792***−1.723**−1.462**−0.825
(1.232)(1.224)(1.612)(0.722)(0.772)(0.781)
Industry FEYesYesYesYesYesYes
Year FEYesYesYesYesYesYes
Wald Stat49.50(0.0000)47.03(0.0000)43.71(0.0000)129.11(0.0000)128.91(0.0000)133.19(0.0000)
AR(1)0.00000.00000.00000.00000.00000.0000
AR(2)0.3210.3180.3320.3270.3130.362
Sargent test (p-value)0.6610.6520.6780.6620.6490.672
Hansen J-stat (p-value)0.9090.9240.9180.9030.9210.928

Note(s): Standard errors in parentheses. ***p < 0.01, **p < 0.05, *p < 0.1

Source(s): Author’s own work
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