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Executive Investigator
Tracking and Analyzing Executive Salaries, Bonuses, and Perks
# Thursday, August 07, 2008
From Financial Week:

CEOs who are hired externally cost more than those promoted from within.

In fact, chief executives hired externally made far more than their counterparts with at least two years’ tenure as CEO, according to an analysis conducted by executive compensation research firm Equilar. At small-cap firms, externally hired CEOs received a median pay package that was 79.8% higher than that of tenured CEOs. Large-cap companies paid external hires 51.1% more and midcap companies paid 10.2% more.

“Companies pay the premium because most people coming in from the outside are stepping into a bad situation,” [Equilar research manager Alexander Cwirko-Godycki] added. “Making the move [to CEO] is less risky for the executive from within because he already knows the company and may know the board well.”

Thursday, August 07, 2008 4:15:02 PM UTC  #    Comments [0]  |  Trackback
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