Hacker News new | ask | show | jobs
by bumby 994 days ago
I think a key difference is that sports regularly "tests" performance to help make sure the cream rises to the top. The practice squads are are playing the exact same positions to vie for a starting gig. How many B-squad business types get to head-to-head with an active CEO for long enough to see who's really got the chops?

As a layperson, it seems like the research is mixed as to whether a specific CEO really matters that much to the bottom line. Despite the inconclusive evidence, though, they sure get paid well like it's a given that they really, really matter.
1 comments
btilly 994 days ago
Overall, there is a negative correlation between CEO pay and performance.

https://chiefexecutive.net/higher-ceo-pay-produce-better-com...

link
bumby 994 days ago
There are other studies that show the opposite though and it's important to not draw strong conclusions from a single study. To quote one study:

"compensation arrangements are endogenous and correlated with many unobservables, measuring their causal effects on behavior and firm value is extremely difficult"

Frydman, C. and Jenter, D., 2010. CEO compensation. Annu. Rev. Financ. Econ., 2(1), pp.75-102.

link