academics: Yet while there have been many important advancements in understanding how compensation is linked to behavior, there are some significant disconnects among the academic theory , its practical application and the opinion of investors, according to Market Watch. What is often missing from conversations surrounding CEO pay is the opinion of the large, sophisticated investors that who own significant holdings of most companies in the country. A significant section of their work focuses on how companies pay CEOs and senior executives, and their findings, along with many other academics, have contributed greatly to a significant shift in the design of CEO pay over the past few decades. And they tell a different story from the academics. While academic models suggest aligning management interest with those of shareholders through various applications of performance-based equity and options, many of these investors feel that modern pay structures overly favor CEOs and that many are able to garner outsize rewards compared with shareholders. Executive compensation has, in their eyes, become increasingly disconnected from the real performance of companies.
(news.financializer.com). As
reported in the news.
Tagged under academics, companies topics.