CEO Pay and Performance Often Mis-Matched

“The best-paid CEOs don’t necessarily run the best-performing companies,” according to a recent article in The Wall Street Journal. The article explains that, although corporate boards try to link top management compensation to performance, the two “often don’t match up, and 2017 was no exception.” It cites data (from MyLogIQ LLC and Institutional Shareholder Services) showing that among S&P 500 CEOs who received raises last year, the 10% who got the highest bumps scored “in… Read More

Study Shows CEOs Cut Investment Right Before Equity Vests

A recent article in the Harvard Business Review addresses the question of whether today’s businesses suffer from “short-termism”—more specifically, if CEOs are cutting investment to pump up their company’s short-term stock price and then cash out their shares. While it may be easy to establish a correlation, the author–London Business School finance professor Alex Edmans–argues that it’s more difficult to establish causation. He participated in a study to determine whether short-termism does in fact exist… Read More