Wake Forest Law Review
Mark J. Loewenstein, The Conundrum of Executive Compensation, 35 Wake Forest L. Rev. 1 (2000), available at https://scholar.law.colorado.edu/faculty-articles/599.
Much of the scholarship on executive compensation that appears in law reviews assumes that large U.S. corporations overpay their chief executive officers ("CEOs"). This assumption is understandable, as many of these compensation packages are indeed stunning. The question of whether CEOs are overpaid, however, is complicated. Some scholars in other disciplines, principally in economics and management science, have studied the issue but, as this Article demonstrates, this literature does not confirm the assumption. Indeed, some studies suggest that CEO pay is competitive. Moreover, efforts to reduce the level of executive compensation may have the unintended consequence of achieving the opposite result. Thus, those seeking to rein in compensation should proceed with caution. This Article concludes with some thoughts on a methodology for further research.
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