On average, 65pc of the value CEOs add to their companies through their vision and managerial skills comes back to them in the form of their cumulative pay, and shareholders divide up the remaining 35pc, according to a novel study of US companies by Bang Dang Nguyen of the University of Cambridge in the UK and Kasper Meisner Nielsen of Hong Kong University of Science and Technology.
The researchers reached their conclusions by looking at what happens to the stock prices of companies after CEOs die suddenly; in most cases, stock prices decline, but sometimes the equity market reacts positively to CEOs’ passing.
(Source: University of Cambridge, Hong Kong University of Science and Technology)
Published in Dawn, Economic & Business, November 17th, 2014
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