CEO Incentive Compensation Is Full Of Fail

Pingree's Potato Patch
Studying the Economics of Detroit

The Huffington Post linked to a couple of recent studies which argue that the highest levels of CEO incentive pay (i.e. "pay for performance") are correlated with dramatic underperformance by the companies offering it. The first (which I've grabbed and uploaded here out of distrust that the Wall Street Journal's link will survive for long) focuses on dollar value of compensation, and is by Michael J. Cooper at the University of Utah, and Huseyin Gulin and P. Raghavendra Rau at Purdue. The second article, which concentrates on the percentage of company income going to CEO compensation, is by Lucian A. Bebchuk of Harvard, Martijn Cremers of Yale, and Urs Peyer of INSEAD.

Categories: Blog, GreatRecession