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Daily Kos: CEOs Panic! Their Lies About Pay Spring MAJOR Leak

Gretchen Morgenson reports that the “market” argument to pay CEOs higher pay to keep them from fleeing to another company is false:

   But a study released last week pretty much drives a stake through that old “pay ’em or lose ’em” line — what you might call the brain-drain defense. It also debunks the idea that companies must keep up with the Joneses by constantly comparing their executives’ compensation with that of similar companies.

    This peer-group benchmark — how executive pay at one company stacks up against pay at another — is a big driver of ever-rising compensation. Boards say it helps them set pay based on what the market will bear.

    Well, maybe not.



Mr. Elson and Mr. Ferrere conclude, contrary to the prevailing line, that chief executives can’t readily transfer their skills from one company to another. In other words, the argument that C.E.O.’s will

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