Lavish CEO Pay Has Virtually Nothing To Do With How Well A Company Performs

CEOs like to justify their sky-high pay by saying it rewards their work in steering companies toward better performance. But a new analysis doesn’t give much evidence to back that up. Equilar, an executive compensation consultancy, compared the salaries of 200 highly paid CEOs to their companies’ performance based on things like profitability, revenue, and stock return. Rather than showing a clear trend line linking pay and performance, the data is scattered. In fact, chief executive pay is only 1 percent based on stock performance, with 99 percent based on other things entirely.