Here's Some Ammo for Skews and MM

Apr 2013
35,420
24,036
Left coast
#1
Highest-Paid CEOs' Companies Perform Worse Than Industry Average: Study



Here’s a piece of investment advice you probably weren’t expecting: Stay away from companies that pay their CEOs the largest salaries.

A study put together by academics at three business schools in the U.S. and U.K. finds that companies with the highest-paid chief executives see much worse stock returns than the industry as a whole. And it’s the CEOs’ arrogance that is apparently to blame.

This chart shows cumulative returns at companies with CEOs in the highest-paid decile in their industry, and companies with CEOs in the lowest-paid decile in their industry, compared to the industry average.

While companies with the lowest-paid CEOs show returns that are more or less in line with the industry average, companies with the highest-paid CEOs show much worse returns for three years after the CEOs are awarded their large compensation packages.

The study came out in January, 2013, and apparently went largely unnoticed until this Business Insider article flagged it.

It found firms that pay their CEOs in the top ten per cent within their industry see returns that are typically 8 per cent lower than the overall industry for three years from the time the large pay package was awarded.

-~-

More, including source links at Highest-Paid CEOs' Companies Perform Worse Than Industry Average: Study
 
Likes: 1 person
Jun 2012
41,942
15,150
Barsoom
#2
Is there a list of companies in the study? What is the 8%? Is it the appreciation of publically traded common stock? Is preferred stock part of the equation? Does the 8% include or exclude dividends to stockholders?
 
Nov 2012
22,947
5,035
Gamma Solaris
#3
Highest-Paid CEOs' Companies Perform Worse Than Industry Average: Study



Here’s a piece of investment advice you probably weren’t expecting: Stay away from companies that pay their CEOs the largest salaries.

A study put together by academics at three business schools in the U.S. and U.K. finds that companies with the highest-paid chief executives see much worse stock returns than the industry as a whole. And it’s the CEOs’ arrogance that is apparently to blame.

This chart shows cumulative returns at companies with CEOs in the highest-paid decile in their industry, and companies with CEOs in the lowest-paid decile in their industry, compared to the industry average.

While companies with the lowest-paid CEOs show returns that are more or less in line with the industry average, companies with the highest-paid CEOs show much worse returns for three years after the CEOs are awarded their large compensation packages.

The study came out in January, 2013, and apparently went largely unnoticed until this Business Insider article flagged it.

It found firms that pay their CEOs in the top ten per cent within their industry see returns that are typically 8 per cent lower than the overall industry for three years from the time the large pay package was awarded.

-~-

More, including source links at Highest-Paid CEOs' Companies Perform Worse Than Industry Average: Study
Does this graph show CEO's as newly hired...in order to extricate these co's from their slide...with those small upward checks in the graph showing successes???
 
Apr 2013
35,420
24,036
Left coast
#4
More ammo for skews and MM. Industrial natural gas usage is not counting any residential or commercial heating, so is considered a good indication of manufacturing activity.

 
Jun 2012
41,942
15,150
Barsoom
#5
More ammo for skews and MM. Industrial natural gas usage is not counting any residential or commercial heating, so is considered a good indication of manufacturing activity.

It seems the usage of natural gas follows the seasonal trends: more in the colder months and less in the warmer months.
 
Likes: 2 people
Nov 2012
39,539
11,526
Lebanon, TN
#7
Ammo for what.. CEOs are paid what the owners deem them worth.

Maybe if they had different lesser paid CEOs the companies would have even earned Less, they could have earned more as well.

But your chart does not note which CEOs or Industry or Sector of the economy in which the companies belong.
 

Similar Discussions