BizEd Magazine: Higher pay, lower returns

The more executives are paid, the more overconfident they tend to become. As a result these CEO invest in riskier projects, approve more aggressive mergers and acquisitions, and spend more wastefully.

Article on research co-authored by Raghavendra Rau, Sir Evelyn de Rothschild Professor of Finance at Cambridge Judge Business School, and his colleagues at Utah and Purdue Universities.

Read the full article [e-digitaleditions.com]