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Thread: Highest-Paid CEOs Run Worst-Performing Companies, Research Finds

  1. #1

    Highest-Paid CEOs Run Worst-Performing Companies, Research Finds

    https://news.slashdot.org/story/16/0...research-finds

    According to a study carried out by corporate research firm MSCI, CEO's that get paid the most run some of the worst-performing companies. It found that every $100 invested in companies with the highest-paid CEOs would have grown to $265 over 10 years. However, the same amount invested in the companies with the lowest-paid CEOs would have grown to $367 over 10 years. The report, titled "Are CEOs paid for performance? Evaluating the Effectiveness of Equity Incentives," looked at the salaries of 800 CEOs at 429 large and medium-sized U.S. companies between 2005 and 2014 and compared it with the total shareholder return of the companies. Senior corporate governance research at MSCI, Ric Marshall, said in a statement: "The highest paid had the worse performance by a significant margin. It just argues for the equity portion of CEO pay to be more conservative."
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  3. #2
    True , if you are running a medium company you are still likely expected to perform to some extent .

  4. #3
    I think I'd have to care enough to tear the number apart, but right off the bat I think they cherry picked their data.

  5. #4
    The highest paid CEOs tend to be at the largest and most "mature" companies where growth in revenues and in stock prices are more difficult to achieve. No surprise in their findings. Smaller companies have more potential for growth.

    List of highest paid CEOs for 2016: http://www.equilar.com/reports/38-2-...ceos-2016.html

  6. #5
    Quote Originally Posted by Zippyjuan View Post
    The highest paid CEOs tend to be at the largest and most "mature" companies where growth in revenues and in stock prices are more difficult to achieve. No surprise in their findings. Smaller companies have more potential for growth.

    List of highest paid CEOs for 2016: http://www.equilar.com/reports/38-2-...ceos-2016.html
    Yeah , just a figure head over a stagnant company that will be happy with any growth and meeting previous success and keeping the spot they have in the pecking order. I worked at smaller places , you had to create large profits continually to keep a spot.

  7. #6
    I'm assuming there are two major problems with that finding,
    1. (which has already been noted), big companies, that can afford to pay top people more, are harder to grow, percentage wise, than smaller companies.
    2. I guarantee you that they started with a list of companies that survived to the end of this period. The results are then skewed by all of the broke, small, companies, where investments went to zero during the 10 year period, that were NOT included, because the companies didn't exist when the study was done.
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