just procrastinating

Thursday, September 09, 2004

Executive Perks
Yahoo had this little Finance quiz today that was kinda interesting. Basically, companies that allow the CEO to use the corporate airplane for personal use have underperformed the market by 4%. Here is the speculation as to why:
One possibility proposed by the study to explain the negative effect is the idea that, “CEOs who consume excessive perks may be less likely to work hard, less protective of the company’s assets, or more likely to tolerate bloated or inefficient cost structures”
I'd say that corporate governance is to probably to blame here. I would bet that in most of these cases the board is pretty weak and the CEO is overpaid.

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