While the Ovitz payout may have been legal, it's the type of corporate behavior that costs investors millions of dollars every year. And it's not just a few spendthrift companies throwing good dollars after bad leaders. We scoured corporate regulatory filings and found plenty of examples of overpaid underachievers in executive suites. Ultimately, we came up with a list of the five most overpaid bad chief executives, and another of the five most underpaid good execs.
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It’s getting worse, by some measures. The ratio of CEO compensation to pay for the rank and file was roughly 200-to-1 in the early 1990s. Now it's more than 450-to-1, says David Lewin, a professor at the UCLA Anderson School of Management. Worse, many average workers are now paid partly through bonus systems and stock options, meaning their livelihoods are tied to often-volatile company stocks. Many executives have similar incentives, but at a vastly greater scale. They win almost regardless of how their stocks fare.
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It’s getting worse, by some measures. The ratio of CEO compensation to pay for the rank and file was roughly 200-to-1 in the early 1990s. Now it's more than 450-to-1, says David Lewin, a professor at the UCLA Anderson School of Management. Worse, many average workers are now paid partly through bonus systems and stock options, meaning their livelihoods are tied to often-volatile company stocks. Many executives have similar incentives, but at a vastly greater scale. They win almost regardless of how their stocks fare.
It really is a disgrace.
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