Why Boosting CEO Pay Makes Companies Perform Badly

Has CEO pay reflected long-term stock performance? “In a word, no.” That’s the verdict of a fascinating new study from MSCI, a research firm catering to institutional investors. In a study of 429 large-cap U.S. companies, done from 2006 to 2015, the firm found that total shareholder returns for companies with CEO pay that exceeded the sector median—by as much as 39%—was actually below companies with less excessive pay.

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