Are CEOs Overpaid? The Case Against

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Capital Ideas is now Chicago Booth Review but unfortunately original articles are no longer available. If you click through you will be taken to the Internet Archive site to find an archived copy.

Steven Neil Kaplan, Neubauer Family Distinguished Service Professor of Entrepreneurship and Finance at Chicago Booth, is making a sometimes–unpopular but data–driven case in defense of high–earning CEOs. Kaplan has written a string of papers challenging the common views that executive pay isn’t tied to performance, that boards rarely punish underperforming CEOs, and that average CEO pay keeps going up.

Instead, he argues, the market for talent largely determines CEO pay. This view puts him at odds with conventional wisdom, popular notion, and some of his colleagues down the hall. But the debate he is eager to have sheds light on questions about CEO pay, and his research suggests the issue is more complicated than is widely portrayed.

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