Hallock says CEO pay should be tied to the success of the company

Cornell University - ILR School: Institute for Compensation Studiesâ„¢: Marketplace taps Hallock for insight on CEO pay
Monday, October 15, 2012

The title of a new Institute for Policy Studies' report, "Executive Excess 2013: Bailed out, Booted and Busted," reflects the notable public frustration over what is seen as undeserved levels of compensation for chief executives.

Sally Herships of Marketplace interviewed Kevin F. Hallock, Director of the Institute for Compensation Studies at the Cornell University-ILR School and Chairman of the Cornell Economics Department, to get his take on why big-ticket recruitment packages for CEOs remain alive and well in the marketplace.

Hallock explains that when a company has billions of dollars in revenues, it can make economic sense to spend millions to make sure you are hiring "the very, very best person, versus the person just below that… [getting the best] might be worth two or five or eight million dollars more." But, Hallock adds, the focus must always remain on pay for performance.

Read and listen to the full story at How much will Microsoft pay its next CEO?