Best-Paid CEOs Run Some of Worst-Performing Companies

25. July 2016

That’s what I would call “meritocracy”, isn’t it? (hfk)

Date: 25-07-2016
Source: The Wall Street Journal

Analysis by MSCI calls into question the idea that high CEO pay helps drive better results

MSCI found that $100 invested in the 20% of companies with the highest-paid CEOs would have grown to $265 over 10 years. The same amount invested in the companies with the lowest-paid CEOs would have grown to $367.

The best-paid CEOs tend to run some of the worst-performing companies and vice versa—even when pay and performance are measured over the course of many years, according to a new study.

The analysis, from corporate-governance research firm MSCI, examined the pay of some 800 CEOs at 429 large and midsize U.S. companies during the decade ending in 2014, and also looked at the total shareholder return of the companies during the same period.

MSCI found that $100 invested in the 20% of companies with the highest-paid CEOs would have grown to $265 over 10 years. The same amount invested in the companies with the lowest-paid CEOs would have grown to $367. The report is expected to be released as early as Monday. Read the rest of this entry »