Corrupt Compensation

corruptcompensationThe Friday File: While some argue that skyrocketing CEO pay is linked to performance, recent research suggests otherwise. Looking at CEO compensation across US firms, British academics find that firms that hired compensation consultants paid their CEOs 7.5% more than those that didn’t. It appears that hiring compensation consultants is how to better justify higher executive pay. Were it about performance, hiring a consultant wouldn’t correlate with higher pay.

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