A contrarian look at CEO pay

Here is my latest New York Times column (non-gated).  Excerpt:

Their [Gabaix and Landier) core argument is simple. If we look at recent history,
compensation for executives has risen with the market capitalization of
the largest companies. For instance, from 1980 to 2003, the average
value of the top 500 companies rose by a factor of six. Two commonly
used indexes of chief executive compensation show close to a
proportional sixfold matching increase (the correlation coefficients
are 0.93 and 0.97, respectively; 1.0 would be a perfect match).

By the way, Japanese CEOs are paid much more than many popular or Internet sources indicate.  American CEOs are paid about three times more than their Japanese counterparts (on average), but not forty or so times more.


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