Are CEOs a Dime a Dozen or Worth Their Weight in Gold?

In recent years, there has been considerable criticism of the amount of money that CEOs earn to run the largest U.S. companies. Governance researchers have expended considerable resources examining executive compensation in an effort to determine whether pay levels are set fairly. The results of these studies are generally mixed.

An important and related question, however, is rarely asked: Just how scarce is CEO talent? How many people are very well qualified to run a large, publicly traded company? These questions have important implications for CEO pay levels, performance measurement, succession planning, and internal talent development.

CEO Talent Pool

Recently, … Read more

CEO Pay, Performance, and Value Sharing

We recently published a paper on CEO compensation and value sharing between executives and shareholders. The paper is available here.

CEO compensation is a controversial subject that evokes considerable debate on whether public company CEOs are paid correctly relative to corporate performance. A recent survey by Heidrick & Struggles and the Rock Center for Corporate Governance highlights the extreme disconnect between public perception of CEO pay and the perception of directors responsible for designing pay packages at Fortune 500 companies. While 65 percent of directors believe that CEO pay is not a problem, a full 70 percent of the … Read more

What Can For-Profit and Nonprofit Boards Learn from Each Other?

We recently published a paper on lessons that for-profit and nonprofit directors can learn from one another about improving organizational governance. The full paper is available here.

For-profit and nonprofit organizations exist for different reasons: for-profits to generate a return on investment for shareholders and nonprofits to pursue charitable and social activities unrelated to commerce. The obligations of the boards of both entities, however, are similar. Both are responsible for oversight of the organization, including reviewing strategy, finances, and performance. Both are also responsible for hiring and firing the CEO (or executive director), evaluating performance, and setting compensation. They … Read more