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Jon Peltier

The different scales don't bother me. What bothers me is that I'd like to see this data in a single chart with stock price along X and compensation along Y. When shown as orthogonal axes, the different scales wouldn't be a problem. Does the NY Times really believe we're too stupid to understand XY charts?

Andreas

Agree with Jon. We need small multiples of payrise vs. total pay and pay rise vs. stock price.

Aleks

What bothers me is that they compare compensation with stock price disregarding the CEO's ownership of the stock! Often, stock options are a lot more important than the salary.

They really should have used a scatter plot too, you don't want to spend a lifetime hovering the cursor over the 2D chart to read off the scatter plot.

Kaiser

Jon and Andreas: let me try it again. The primary point of the graphic is to make statements like "Mr. CEO got a 50% pay hike while his company's shareholder value increased by 10% only", implying that the CEO got overpaid. One can certainly find the information from this graphic but because of different scales, the graphical component is rendered redundant, in the sense that the distances were distorted. The distortion arose because the scales were determined by the inter-company comparisons.

An additional issue is what they mean by "similarly sized" companies, and why the size of the company matters, rather than, say, the industry they are in.

Matt

The change in stock price vs change in compensation is somewhat meaningless, IMHO, since for it to be meaningful, it would assume that all executives of comparable companies were paid at an equal rate in the previous year (the baseline year for the calculating the change in compensation.)

There's no real way to measure this, but if I'm a company, and by doubling the CEOs pay from a measly $1,000,000 to $2,000,000 (a +100% increase), I could bring in an extra $50 million in revenue and therefore up my stock price (but by no means double it), it's a no brainer that the extra million paid to the CEO is well worth it, since it brought in far more in extra revenue.

Meanwhile, a company who has overpaid their CEO with a huge salary the previous year and ups his compensation at a rate less than the change in stock price may appear to be doing well, but in actuality, is paying more more than they should, since the previous year's salary was way out of line.

It's interesting to have the two numbers side-by-side when judging a CEO's compensation, but I'd hesitate to try and read to much into assuming that there should always be a perfect correlation with change in stock price vs change in compensation.

Penny Stocks

The change in stock price vs change in compensation is somewhat meaningless, IMHO, since for it to be meaningful.Thanks for good information.

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