CEO pay influenced by performance, power, and governance, study finds.
The article examines what factors influence CEO pay in US firms from 2006 to 2016. They found that firm performance, CEO power, and governance conditions all play a role in determining CEO compensation levels. The study suggests that CEO pay is not solely based on performance, but also on other factors like CEO power and governance practices. This research can help regulators, policymakers, and boards of directors better understand how to align CEO incentives with shareholder interests.