Elon Musk at Tesla isn’t the only chief executive earning a gargantuan pay packet, with a recent Equilar study finding the median CEO pay at S&P 500 has risen by 12.6 per cent last year, to $16.3 million (€15.2 million).
US executive pay is especially high, causing some British chief executives to make the argument that their smaller compensation packages are driving companies to seek listings on US stock exchanges, and that you have to pay for top talent.
However, a recent study suggests American chief executives aren’t getting better – they’re getting worse. The study, Have CEOs Changed?’, uses 4,900 assessments to study changes in the characteristics and objectives of chief executives since 2001.
Chief executives have changed over that period, and some of the changes – for example, executives have become more execution-oriented and analytical – are good.
Price of getting on the housing ladder racing ahead of earnings
Elf doors, carriage rides and boat cruises: Christmas in Ireland’s five-star hotels
Ireland has won the corporation tax game for now, but will that last?
Corkman leading €11bn development of Battersea Power Station in London: ‘We’ve created a place to live, work and play’
Other changes – they have become less creative and strategic – are not so good. The main point, however, is that the average chief executive has “lower overall ability” than predecessors, it notes. That’s the apparent paradox of the modern chief executive: lower competence but higher compensation.
- Sign up for Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Find The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
