This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Is The Boss Really Worth Their Pay The Good And The Bad Of CEO Salaries

Consumers and investors alike are starting to question just how responsible companies are when it comes to the environment, social or governance (ESG) issues. In line with this, sustainably-minded investors are questioning the sometimes over-inflated compensation packages many CEOs are receiving.

Executive Compensation

When thinking about ESG (environmental, social and governance) issues, internal corporate behavior can sometimes take center stage. One part of corporate governance behavior is executive compensation. It is clear that CEO pay has been increasing at an alarming rate when compared to the average worker.  Is it warranted though?  In some cases, perhaps, but as you can see in this post, there are numerous examples of CEOs making millions when their shareholders are losing big.

According to a recent study put out by the Economic Policy Institute, chief executives at America’s 350 biggest companies were paid 231 times as much as the average private-sector worker in 2011. Unbelievably in 1978, CEOs took home only 26.5 times more than the average worker.

Granted, compensation for a job well done can be warranted, but many shareholders have lost value in their stock position while their CEOs pull in millions.  Some companies that have paid their CEOs lavishly while their stock price has plummeted include:


Press “play” on Kapitall’s Compar-O-Matic to see how CEO compensation for the stocks listed above has changed in the past two years.

On the other end of the spectrum the following companies have some of the lowest compensated CEOs and have brought healthy 5-year returns to their investors:

Press “play” on Kapitall’s Compar-O-Matic to see how CEO compensation for the stocks listed above has changed in the past two years.

‘Tis the Season: CEOs in Retail

In light of this shopping season, below we can see which clothing retailers are returning shareholder value along with keeping CEO compensation to a minimum (Gap, Foot Locker) and also the companies who are poor performers when it comes to shareholder return and excessive CEO pay (JC Penney and Abercrombie and Fitch).

Using Kapitall Compar-O-Matic tool, here is a comparison of the CEO compensation against one-year returns on stock price in the retail sector:

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
SYM TRADE IT LAST %CHG

Markets

DOW 18,227.75 -57.99 -0.32%
S&P 500 2,127.87 -2.95 -0.14%
NASDAQ 5,092.5240 +1.73 0.03%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs