Carl Remick wrote:
I do not understand the following comment of Norris at all: "With capital in a weakening position, returns that would once have gone to owners of capital now are redirected. That is one way to explain the surge in management compensation over the past two decades. In the early 1980s, when interest rates were high and stock prices low, the average U.S. chief executive got no stock options in any given year. Now nearly all get large grants, and one study found that chief executive pay rose faster than that of any group save for professional athletes and movie stars."
First of all, CEO compensation is pretty small relative to overall returns on capital. But CEO compensation is a form of return on capital, so we're just talking about the division of the booty, not its redirection somewhere else.
Doug
