CEOs are Just Like Us Finally!
by Miki SaxonThe news that we’ve all been waiting for—unless you’re a CEO who is paid relative to your counterparts.
According to new research by Charles M. Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware, and Craig K. Ferrere, one of its Edgar S. Woolard fellows, the whole idea that a CEO will quit if he isn’t paid more than his peers is, to use a technical term, hogwash.
…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 leave if they aren’t compensated well, perhaps even lavishly, is bogus. (…) “It’s a false paradox,” Mr. Elson said in an interview last week. “The peer group is based on the theory of transferability of talent. But we found that C.E.O. skills are very firm-specific. C.E.O.’s don’t move very often, but when they do, they’re flops.”
Surprise, surprise.
For ‘firm-specific’ read culture and colleagues—the same two things that impact any worker’s success.
Flickr image credit: GDS Infographics (click the graphic to see a large version)