The highest paid CEOs actually run the least successful companies, according to study
High pay doesn't necessarily correlate with high performance.
In fact, thanks to information found in a new study from MSCI, the opposite seems to be true.
The study focused on 429 U.S. companies over a 10-year period.
According to a summary of the report by CNN Money:
"The report found that average shareholder returns over the decade were 39% higher when a company's CEO was in the bottom 20% of earners compared to a CEO in the top 20% of earners."
In other words, CEOs who were paid significantly less on average were able to retain a higher amount of shareholders in their company than CEOs who were paid more annually.
This same pattern was also found in another part of the study, where data showed that CEOs who were paid "above average" in their sector had underperformed in comparison to other companies in their sectors where the CEOs were paid below average.
Underachieve and get over-compensated? That seems to be the trend.
As MSCI put it themselves:
"Has CEO pay reflected long-term stock performance? In a word, 'no.'"
Now, take a look at the top rated CEOs of 2016: