Executive compensation has risen dramatically beyond the rising levels of an average worker's wage over the years. This has been a hot topic for discussion, especially with the crisis in the financial sector and the controversy over the federal bailout. The government is even considering a cap on high-flying salaries for executives (The New York Times, February 9, 2009). Consider the following portion of data that link total compensation of the 455 highest-paid CEOs in 2006 with two performance measures (industry-adjusted return on assets, ROA, and industry-adjusted stock return) and the firm's size (Total Assets).

In a report, use the sample information to:
1. Estimate two models where each model uses Compensation as the response variable and Adj ROA and Adj Return as the explanatory variables along with Total Assets in Model 1 and natural log of Total Assets in Model 2.
2. Use the preferred model to predict compensation given the average values of the explanatory variables.

Compensation Total Assets (in $ million) Adj ROA Adj Retum in $ millions) 16.58 2.53 -0.15 0.57 209175 26.92 1.27 32659.5 0.45 0.75 44875.0