Are CEOs Paid for Performance? Evaluating the Effectiveness of Equity Incentives

The paper examines whether CEO pay reflects long-term stock performance, and finds that it does not. It finds that companies that awarded CEOs higher pay incentive levels had below-median returns based on a sample of 429 larwge-cap U.S. companies observed from 2005 to 2015. On a 10-year cumulative basis, total shareholder returns of those companies with total summary pay  below their sector median outperformed those companies where pay exceeded the sector median.