A Hidden Story Behind High CEO Pay Article by Sunny Rosen March 04, 2021
New research from UDâs Hamed Mahmudi explores key factor in CEO compensation
As high pay for chief executive officers becomes an increasingly hot topic, many people are asking why CEO salaries have increased so drastically in recent years. New research from the University of Delawareâs Hamed Mahmudi has revealed a factor that could play a key role in answering this question.
The factor? Corporate boardsâ hiring of compensation consultants who help them decide how much to pay their CEOs. Mahmudiâs research, published recently in the Journal of Financial and Quantitative Analysis, found that whether consultants are independent or have potential conflicts of interest strongly influences how much CEOs are subsequently paid.