Deep Misalignment Between Corporate Economic Performance, Shareholder Return and Executive Compensation
Study by IRRC and Organizational Capital Partners finds Deep Misalignment Between Corporate Economic Performance, Shareholder Return and Executive Compensation:
Only 12% of CEO Pay Determined by Economic Performance; More than 75% of S&P 1500 Companies Not Equipped to Measure, Manage Key Factors Driving Sustained Corporate Value
NEW YORK, NY, NOVEMBER 17, 2014 - For the vast majority of S&P 1500 companies, there is a major disconnect between corporate operating performance, shareholder value and incentive plans for executives. New research details an over-reliance on accounting metrics that do not measure capital efficiency, and how total shareholder return obscures a line of sight to the underlying drivers of economic performance. Economic performance explains only 12% of variance in chief executive officer (CEO) compensation.
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