An American study shows that investors have reason to be pleased, if the CEO is paid a higher salary above average - if certain preconditions are met.
What if the governments of listed companies' confidence in the ability to review, and not even try to self-assess their competence or suitability of the CEOs? External will always make such judgments from a distance, the government has instead hired a director, and follow his work up close.
The meter works, if CEOs are paid according to ability. Palkkahan is the only public assessment by the government, the CEO usually present.
If the Director of salaries reflects the talent, the money should guide a company whose CEO earns more if the companies are otherwise equal strength and their wage levels comparable. Logical assumption is perhaps that a talented managing director of the company's success is more likely than mediocre.
Thus, in theory, but how practical?
Take for example two in the same sector, an international Finnish companies. Second CEO last year earned a total of just over 1.4 million, just short of another 700 000. So is the second CEO in fact two times better qualified than the other? In pay, or whether some other explanation?
Skillful leader breaks the poor development
American researchers have analyzed the salaries of managers and their differences more broadly. Three prestigious University researchers estimated a recent study (Robert Dainese, Vinay Nair, and Lewis Kornhauser: The Good, The Bad and The Lucky: CEO Pay and Skill, 2005), listed companies, the CEOs pay gap: etevyydestä paid CEOs, or whether the leaders behind the soaring pay gap, usually other reasons -- for example, good relations with members of the company's directors?
First, the researchers wondered how CEOs in general skills can be measured. Usually measured using the historical result of the fitness business, but this makes it difficult to compare the CEOs. Unfit company received over the director seems easy in good condition luotsaavaa company of his fellow speakers.
That is why the Americans arrive to assess the company's financial performance in relation to its own past. If the company has done poorly compared with its competitors, a skilled CEO breaks the poor are more likely than the development of his careless colleagues.
If, however, the company has previously done well, a skilled manager will be able to keep the company's success in their careers. Inept manager of the company to increase the risk of drift into the sidelines.
Researchers can not complain, at least not laziness. The trio analyzed a total of 2 300 U.S. listed companies. The review covered the period from 1992 to 2001.
Strong owner does not pay for nothing
The study shows that investors have reason to be pleased, if the CEO is paid above average wages for better-if certain preconditions are met.
The researchers found a clear connection between good salaries and etevyyden between the CEOs, small listed companies with at least one of the strong ownership of the companies in which the environment gives the CEO a lot of freedom of action.
At the same mouth also affects the performance-related pay: if a big part of the CEO salary is tied to company performance, the connection between pay and performance will be further strengthened. The researchers conclude that, based on its performance without a leader to leave part of their capabilities to use easily.
Surprising is not the size of companies, meaning: in earlier studies it is known that in general, more strongly affect the CEO of a small business success as much.
The study, however, the real gem is this: that the CEOs of remunerative enterprises were also able to clearly to shareholders a better return than companies huonopalkkaisten leaders. The spread was a ten-year study period, no fewer than eight percent.
Talents and pay the connection is lost in many large companies
The researchers also stress the predictive interpretation of the wage: if the government decides to pay the new CEO clearly a higher salary than his predecessor, the investor is also reason to expect improvement in its performance.
At the same time, however, they warn innostumasta too much. Good wages, good results and good returns connection works only in the cases described above - not in general.
Contact is lost in large listed companies, with no one in the strong hands and the CEOs whose freedom of action was limited. Kallispalkkaiset leaders of those companies seem to be going to even poorer results than their lower wages ahkeroivat colleagues.
Cynical investor in mind also the fact that money can not buy integrity. America's most famous corporate scandal of WorldCom, Enron's chief Tyconiin and tienasivat average of 100 million U.S. dollars or a business slump in the year preceding discovery of irregularities.
What if the governments of listed companies' confidence in the ability to review, and not even try to self-assess their competence or suitability of the CEOs? External will always make such judgments from a distance, the government has instead hired a director, and follow his work up close.
The meter works, if CEOs are paid according to ability. Palkkahan is the only public assessment by the government, the CEO usually present.
If the Director of salaries reflects the talent, the money should guide a company whose CEO earns more if the companies are otherwise equal strength and their wage levels comparable. Logical assumption is perhaps that a talented managing director of the company's success is more likely than mediocre.
Thus, in theory, but how practical?
Take for example two in the same sector, an international Finnish companies. Second CEO last year earned a total of just over 1.4 million, just short of another 700 000. So is the second CEO in fact two times better qualified than the other? In pay, or whether some other explanation?
Skillful leader breaks the poor development
American researchers have analyzed the salaries of managers and their differences more broadly. Three prestigious University researchers estimated a recent study (Robert Dainese, Vinay Nair, and Lewis Kornhauser: The Good, The Bad and The Lucky: CEO Pay and Skill, 2005), listed companies, the CEOs pay gap: etevyydestä paid CEOs, or whether the leaders behind the soaring pay gap, usually other reasons -- for example, good relations with members of the company's directors?
First, the researchers wondered how CEOs in general skills can be measured. Usually measured using the historical result of the fitness business, but this makes it difficult to compare the CEOs. Unfit company received over the director seems easy in good condition luotsaavaa company of his fellow speakers.
That is why the Americans arrive to assess the company's financial performance in relation to its own past. If the company has done poorly compared with its competitors, a skilled CEO breaks the poor are more likely than the development of his careless colleagues.
If, however, the company has previously done well, a skilled manager will be able to keep the company's success in their careers. Inept manager of the company to increase the risk of drift into the sidelines.
Researchers can not complain, at least not laziness. The trio analyzed a total of 2 300 U.S. listed companies. The review covered the period from 1992 to 2001.
Strong owner does not pay for nothing
The study shows that investors have reason to be pleased, if the CEO is paid above average wages for better-if certain preconditions are met.
The researchers found a clear connection between good salaries and etevyyden between the CEOs, small listed companies with at least one of the strong ownership of the companies in which the environment gives the CEO a lot of freedom of action.
At the same mouth also affects the performance-related pay: if a big part of the CEO salary is tied to company performance, the connection between pay and performance will be further strengthened. The researchers conclude that, based on its performance without a leader to leave part of their capabilities to use easily.
Surprising is not the size of companies, meaning: in earlier studies it is known that in general, more strongly affect the CEO of a small business success as much.
The study, however, the real gem is this: that the CEOs of remunerative enterprises were also able to clearly to shareholders a better return than companies huonopalkkaisten leaders. The spread was a ten-year study period, no fewer than eight percent.
Talents and pay the connection is lost in many large companies
The researchers also stress the predictive interpretation of the wage: if the government decides to pay the new CEO clearly a higher salary than his predecessor, the investor is also reason to expect improvement in its performance.
At the same time, however, they warn innostumasta too much. Good wages, good results and good returns connection works only in the cases described above - not in general.
Contact is lost in large listed companies, with no one in the strong hands and the CEOs whose freedom of action was limited. Kallispalkkaiset leaders of those companies seem to be going to even poorer results than their lower wages ahkeroivat colleagues.
Cynical investor in mind also the fact that money can not buy integrity. America's most famous corporate scandal of WorldCom, Enron's chief Tyconiin and tienasivat average of 100 million U.S. dollars or a business slump in the year preceding discovery of irregularities.