Study | The Argument that C.E.O.’s Will Leave if They Aren’t Compensated Well, Perhaps Even Lavishly, is Bogus

C.E.O.’s and the Pay-‘Em-or-Lose ‘Em Myth

New research by Charles M. Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware, and Craig K. Ferrere, one of its Edgar S. Woolard fellows, begins by attacking this conventional wisdom. Mr. Elson and Mr. Ferrere conclude, contrary to the prevailing line, that chief executives can’t readily transfer their skills from one company to another. In other words, the argument that C.E.O.’s will leave if they aren’t compensated well, perhaps even lavishly, is bogus. Using the peer-group benchmark only pushes pay up and up.

“It’s a false paradox,” Mr. Elson said in an interview last week. “The peer group is based on the theory of transferability of talent. But we found that C.E.O. skills are very firm-specific. C.E.O.’s don’t move very often, but when they do, they’re flops.”

Full article here…

Copy of the study below…

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4closureFraud.org

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Executive Superstars, Peer Groups and Over-­‐Compensation – Cause, Effect and Solution

Comments
One Response to “Study | The Argument that C.E.O.’s Will Leave if They Aren’t Compensated Well, Perhaps Even Lavishly, is Bogus”
  1. stripes says:

    The truth is, if we take our money and signatures out of their greedy hands…. we take all of them out. They are out of business. They are done. They don’t want to use the wealth they have stolen from us to keep their ponzi scheme going.

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