Gustavo Ballvé on September 2nd, 2010
Corporate Governance, Food for thought, Home

Booz & Co.’s Strategy & Business has a summary of a recent paper on CEO compensation. It’s public knowledge that it has skyrocketed in the last 20 years or so, but this paper searches for a driver – and finds it in “compensation benchmarking” (fee or subscription required). You could also call it “The grass is always greener” effect. It was always intuitive to picture CEOs looking at (selected) peers earning inflated packages and hiring compensation consultants who, surprise surprise, would dial up the numbers, aided by complacent Boards (usually made up of, you guessed it, peer-company CEOs).

Nothing new, but always nice to emphasize.

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