Wednesday, May 28, 2014

WSJ's CEO Pay Rises Moderately

Here is a WSJ article about the rising pay for CEOs.

Here is a quote:

The Wall Street Journal's annual compensation survey found that, for all the debate around high CEO pay, the biggest rewards go to a relative handful of executives at the very top, and that their pay doesn't necessarily correlate to their company's size or results.


  1. This quote really caught my eye -

    "None of the companies with the 10 best-paid CEOs ranked in the top 10% by 2013 performance."

    Why do these CEO's have such high compensation then? I wonder how the these company's performance might have been different if more money had been invested into growth opportunities as opposed to paying such exorbitant salaries. I also wonder why some of these CEO's don't just move to a one-dollar salary to avoid some of the media attention.

  2. This reminds me of Piketty's discussion of CEO compensation. As Piketty suggests, I think CEO compensation reflects the CEO's bargaining power within the corporation due to social hierarchies as well as the difficulty to quantify the CEO's contribution due to size and the complexity of these corporations.

  3. You both make strong points. I think this also goes back to what Piketty alluded to when talked about the marginal productivity of labor being an illusion. It is almost impossible to quantify a CEOs contribution to a particular corporation. The most realistic solution to this situation, in my opinion, is more shareholder activism.

  4. The statistic that Sanj points out is a little ironic considering that the largest chunks of CEO compensation these days come from "performance based" stock options, et al. Guess that's a bit of a lie..