CEO pay in the U.S. is not “excessive” but rather reflects pay-for-performance packages, according to a new paper.
Writing in the Review of Financial Studies, the authors of “Are US CEOs Paid More? New International Evidence” say the bulk of American CEO compensation tends to be from equity rather than a base salary, it appears to skew higher.
But when you control for firms’ sales, industry, and firm, ownership, and board characteristics, U.S. pay is only slightly above the global average.
We can also tell which countries have the best comp (U.K.), and the worst (France, Sweden).
Here’s the chart:
International differences have only become less noticeable, they add. In 2003, U.S. CEO pay premium was 58%. By 2007, they say, it had become statistically insignificant.
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