How much CEOs are compensated is often a subject of angst in the media and among the public. When a company’s board of directors hires a new chief executive, it’s often perceived that the level of compensation is not based on the value of the CEO to the firm, but on other factors—such as how many connections the new hire has on the board.
A recent study from the University of Nebraska-Lincoln provides evidence, however, that CEOs who turn out to be successful are the ones who are offered higher compensation packages from their boards at the outset.
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