WHY ARE SOME CEO SALARIES SO HIGH? MIGUEL ANTÓN, FLORIAN EDERER, MIREIA GINÉ AND MARTIN C. SCHMALZ
l
Despite public indignation, many CEO salaries – which are already hefty – keep soaring and without any clear link to the needs of running the business. Why? Profs. Miguel Antón and Mireia Giné took part in a study that links inflated CEO salaries to the growing presence of common shareholders in publicly traded companies in the United States; common shareholders have an interest in discouraging competition among firms in their portfolios. According to the authors, the goal of the biggest portfolio managers is clear: “To maximize the value of their entire stock portfolio, rather than the performance of individual firms within that portfolio.” The greatest concentration of common shareholders occurs in the financial sector, construction, manufacturing and services. MORE INFORMATION: IESE Insight / Leadership and People Management
¿ ? ¿
Listen to the Non-Experts JOHN ALMANDOZ AND ANDRÁS TILCSIK
?
Boards need expert advice to help guide management decisions. Common sense might then suggest that packing more experts on a board would make a good thing better. But do more experts really amount to a better-functioning board? The answer is “no,” according to a study published in the prestigious Academy of Management Journal. Contrary to what we might expect, too many experts on a board can be downright dangerous and lead to business failure. This finding can help boards and shareholders construct more effective corporate governance structures.
?
MORE INFORMATION: IESE Insight / Corporate Governance
CASE
Making the Right Investment Decision ROBERTO GARCÍA-CASTRO
As a veteran of Abbey Road Studios, Ian Jones knew that the golden age when the Beatles recorded at the studios was long gone. In May of 2016, during recording for the first album of the up-and-coming group the Condors, their manager proposed a deal: half a million dollars for the production and marketing
Alumni Magazine IESE
of the group’s second album, if the first was successful. In exchange, the studio would have exclusive rights to the second album. It sounded like risky business, but what if the Condors were the next Beatles? PARTICIPATE IN THIS CASE FORUM: www.ieseinsight.com/review
JANUARY-MARCH 2017 / No. 144
33