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Because research has shown there’s an inverse correlation between CEO pay and company performance.¹ ¹ https://online.wsj.com/public/resources/documents/CEOperf

by jbronn 9y ago

Because research has shown there’s an inverse correlation between CEO pay and company performance.¹ ¹ https://online.wsj.com/public/resources/documents/CEOperformance122509.pdf https://online.wsj.com/public/resources/documents/CEOperform...

LyndsySimon 9y ago
That doesn't seem surprising at all - a CEO's reputation is tied to the reputation of their company, so it makes sense that a poorly-performing company would have to pay more to attract the same level of expertise as a well-performing one. If the poorly-performing company fails, then the CEO's market value will decrease. Higher compensation offsets that.