Highest-paid CEOs run the worst-performing companies

The highest-paid CEOs tend to run the worst-performing companies, according to research by MSCI.

The study found that the highest-paid CEOs delivered lower returns when looking at $100 invested in a company over 10 years.

High-paid CEOs delivered a return of $265 for every $100 invested over 10 years, while the lowest-paid CEOs delivered $367.

The report analysed the salaries of 800 CEOs at 429 large and medium-sized US companies between 2005 and 2014 and compared them against total shareholder returns.

“Equity incentive awards now comprise 70% or more of total summary CEO pay in the United States, based on our calculations. Yet we found little evidence to show a link between the large proportion of pay that such awards represent and long-term company stock performance,” stated the report.

After adjusting the results for company size and sector, companies with lower total CEO pay were consistently providing higher long-term investment returns.

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Highest-paid CEOs run the worst-performing companies