Here is a link to the study, looks pretty thorough.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
Performance for Pay? The Relation Between CEO Incentive Compensation and Future Stock Price Performance by Michael J. Cooper, Huseyin Gulen, P. Raghavendra Rau :: SSRN