Basing the compensation of accounting professors on merit pay in order to encourage better teaching, research and service is controversial. This study uses data from a survey of the 852 accounting programs in the United States to empirically examine the influence of merit-based salary plans. Findings indicate a strong positive association between the presence of a merit plan at a school and the quality of the school's research outcomes. However, no association was found between the presence of a merit program at a school and the school's teaching outcomes.