
The Highest-Paid CEOs Are The Worst Performers, New Study Says - dbingham
http://www.forbes.com/sites/susanadams/2014/06/16/the-highest-paid-ceos-are-the-worst-performers-new-study-says/
======
nostrademons
This may be a correlation-vs-causation effect. It's possible that companies
that are in poor markets and likely to do poorly in the next few years _have
to pay more_ to attract qualified CEO candidates, because good executives
realize the shit the company is in and don't want to take the risk of a
failure on their resume without being compensated significantly for it.

This would also explain why the negative correlation is strongest at the
extreme high ends of the pay scale - these are the companies that are in the
worst shape - and why these CEOs relied heavily on acquisitions, because they
had no talent or useful products in the organization itself. It also fits with
Warren Buffett's observation that "When a management with a reputation for
brilliance tackles a business with a reputation for bad economics, it is the
reputation of the business that remains intact."

One way to confirm or deny this hypothesis would be to look at companies that
previously were high-performing, and then see what the correlation between CEO
pay and the change in market performance is within that group.

~~~
Ygg2
I'd argue it's not.

People that are paid most to do a job that isn't repetitive manual labor have
worst performance scores, time and time again.

So unless CEOs are paid to manually bolt things or throws ball into a hoop,
they probably aren't doing well because, in part, they are given money. Money
introduces fear (i.e. fear that you won't make enough money or lose your
position with lots of money) and that leads to tunnel vision.

People give more performance if you give them more autonomy, mastery and
purpose.

[https://www.youtube.com/watch?v=u6XAPnuFjJc](https://www.youtube.com/watch?v=u6XAPnuFjJc)

~~~
Fuxy
I would argue the opposite with so much money on at your finger tips you are
more prone to bad decisions because you are not invested enough in the
outcome.

You ear more in a year than you can spend in a life time what are the chances
of you looking a every deal very attentively?

You do the absolute minimum to maintain your position but you're not driven
enough to put more effort into it.

------
abraxasz
Ok, so I do believe that CEO's are usually overpaid with regard to their
performance. That being said, I am not convinced by the methodology used in
the study, specifically the period used for measuring the performance: 3
years. It sounds like a lot of time, but actually, I would expect a truly
great CEO to undertake projects with a 5 years or more horizon. There's this
great interview of Bezos discussing the point of focusing on quarterly results
vs long term. So an alternative explanation for the findings could be: the
highest paid CEOs invest in 5-10 years projects, so their results after 3
years are below average.

Again, I repeat that even before reading the study, I intuitively agreed with
their conclusion, but I'm not so sure about their argument to prove it

~~~
CWuestefeld
Looking at the first 3 years seems almost doomed to failure. It seems to me
that it's pretty likely that a new CEO is going to be taking a company in a
direction at least slightly different.

That means cutting out some projects may have been just about to pay off,
while at the same time embarking on new ventures that won't bear fruit for
some time.

One might interpret these results to say, "the highest-paid CEOs are engaging
in the most expensive change for their firms". It's only natural that
significant change is both forgoing some income that would have been realized
soon, and creating risks for what's in the short-to-medium term while they
look to the horizon.

This is all to be expected, and doesn't necessarily say anything about the
amount of value they create in the long term.

~~~
Spooky23
Stock prices are based on the market's view of the future. You don't evaluate
a CEO like a middle manager. If he cuts some critical program for strategic
reasoning, the market will either punish him or reward him based on the future
outlook.

~~~
TheOtherHobbes
Stock prices are animal herd logic, not science. See e.g.

[http://papers.ssrn.com/sol3/papers.cfm?abstract_id=670404](http://papers.ssrn.com/sol3/papers.cfm?abstract_id=670404)

If you believe that business should have long-term horizons and not simply be
a machine for organising the maximum possible quarterly profit, stock markets
in their current form are one of the least efficient ways to organise labor
and capital.

Inflated CEO pay is only one symptom of this.

~~~
CWuestefeld
_Stock prices are animal herd logic, not science_

That's not how I understand your link. The study suggests to me that analyst
recommendations are unreliable predictors of short-term gain. And it certainly
does not show that changes in a company's overall market capitalization are
based on a herd mentality.

Note that it says that those rebalancing according to advisors achieved higher
terminal wealth, but lower risk-adjusted return. Most importantly, they _did_
do better in the end. But adjusted for risk, it's worse. This suggests to me
that the analysts usually do pretty well, but when they flub it, it's a doozy.

------
JacobJans
I think this is the most interesting excerpt from the study:

"The level of incentive compensation is significantly negatively related to
the forward ROA, while the level of cash compensation is positively related to
the level of ROA.

Overall, we conclude that our results seem most consistent with the hypothesis
that overconfident CEOs accept large amounts of incentive pay and consequently
engage in value destroying activities that translate into future reductions in
returns and firm performance. "

~~~
tjradcliffe
I wonder about that "overconfident" label, and it might be possible to tease
various effects out of the data.

Consider two possibilities:

1) CEOs with large incentive pay are irrationally confident in the success of
risky policies

2) CEOs with large incentive pay are behaving like economically rational
agents... betting someone else's money.

That is, incentive pay is more like a free pass to a casino where your losses
are made good but you keep some fraction of your winnings. Under those
circumstances taking large risks may be the most rational thing to do, IF the
cash component of the CEO's compensation is sufficient to keep them in caviar
and summer homes while they gamble the firm's money away.

~~~
camelite
Your second possibility covers not only executives who partake in high-risk
gambles but also executives who deliberately bankrupt their company for
personal profit. A canny executive doesn't rob the firm by dipping his fingers
in the till but by, for instance, loading the firm with gold-plated rubbish
and extracting a personal profit in the form of compensation, stock-options
etc, before the sheen wears off.

------
Eliezer
I'm skeptical because it sounds like this effect should be tradeable, unless
they're using some measure of shareholder returns which doesn't imply that you
could short-sell high-paid-CEO equities and buy median-paid-CEO equities and
get an excess return. In other words, it sounds like this study is postulating
an _exploitably_ inefficient market, unless this kind of data only recently
became available.
[http://lesswrong.com/lw/yv/markets_are_antiinductive/](http://lesswrong.com/lw/yv/markets_are_antiinductive/)

To be clear, I'm very willing to believe that the companies with the highest-
paid CEOs have generally poor governance and will antiperform on some
appropriate metric, like price-to-book. But that metric shouldn't be equity
price changes because CEO pay is public info, people are already speculating
about it as a negative sign, and the market should already be taking that into
account and pricing such shares lower (meaning that the returns cost less,
hence such stocks should return the market rate, albeit perhaps with greater
volatility).

~~~
ucha
It doesn't matter that the effect is tradable. What matters is that there is
no possible arbitrage i.e. a way to make money with a 100% probability. For
example, would you enter a bet in which you have a 50% chance of loosing $1000
and a 50% chance of making $1001 if you can enter it only once a year?

There are many many observable patterns that contradict the efficient market
hypothesis amongst which:

\- historical option volatility is lower than implied vol - you can make money
by writing options.

\- sell in may and go away strategy - you can make money (and beat the index)
by being long the SP500 only between october-may

\- strong contango in the VIX futures market - you can make money by shorting
a volatility ETN like VXX that rolls near-maturation future contracts.

\- mean-reversion on the second day after an earnings release - you can make
money by going short if the stock price rises after the earnings call or vice-
versa

In the end, what matters is how much risk (volatility, max drawdown...) you're
willing to take for superior returns. That is often summarized by the
information ratio of your strategy which is equal to (return of your strat -
return of the bechmark)/vol(difference in returns).

~~~
emmett
Yes, if this was a very high volatility bet with a low payout that can't be
easily repeated it might not be arbitraged away efficiently.

But this should let you make predictions about literally every single company
in the world if it's true. You can take it thousands of times, not once per
year. So I don't think the situation you're positing applies here.

If CEO salary was a signal as to equity performance, you could make a "CEO
salary weighted S&P index" that should outperform the S&P consistently. Which
we don't observe. Therefore it probably isn't a signal. Or if it is a signal,
it's very weak.

~~~
ucha
In short, you're saying that by diversifying your holdings across thousands of
companies, you can statistically arbitrage the signal but it is not true.

You could make predictions for every company in the world but you'd need both
the signal to be right most of time, over any time period, be uncorrelated
across companies and have an excess return collectable over a period short
enough. If any of these conditions are not met, you will not be able to
statistically arbitrage it. Take options for example, writing them (selling
them) is a strategy you can backtest and it has positive return on average.
You can write options on thousand of stocks, every week. But because
volatility - on which the option price depends - is correlated across stocks,
this strategy will incur a large loss on a financial crisis. Your
diversification will not matter.

Also, you say that we don't observe the signal but you can't know, maybe we
do. There are tons of simpler signals - some of which I cited above - that we
still observe.

------
malandrew
I'm really curious about the relationship of CEO compensation and employee
satisfaction/morale in companies. I have lost count of the number of times
I've heard about a CEO, COO or CFO getting 8 figure salaries while the rank
and file employees had to forego their bonuses in a touch year. I cannot begin
to imagine how devastating that knowledge is to employee morale.

~~~
nyrina
The best I remember is that a Danish bank (I think it was "Nordea" or "Danske
Bank", but I'm not sure and my search-karma seems to have gone for the day)
had a CEO who got a huge bonus for meeting his goals in making a profit back
in 2009 or 2010.

The way he did that, though, was to fire 30% of the staff (and branches) and
living off the profit from the hard work those 30% did the previous years -
the next years they had bigger and bigger deficits, because they couldn't keep
living off previous years loans.

------
reversiontomean
Is it possible that what we're seeing here is a reversion to the mean[1] -
CEOs who do particularly well some years get large pay packages, and then when
their performance reverts to the mean in subsequent years they end up overpaid
relative to performance?

[1] Thinking, Fast and Slow by Daniel Kahneman

~~~
mtdewcmu
You beat me to it. Another way to state it would be that having a richly-paid
CEO is a lagging indicator; or the companies with the resources to have a
trophy CEO are likely already topped out and running up against the law of
large numbers. Imagine being Tim Cook, CEO of Apple: he ought to expect high
pay for such a prestigious job (I haven't looked it up), but continuing to
grow the stock price at past rates would be next to impossible.

~~~
jsw97
Yes, but they are not comparing future performance to past performance, but
rather to that of similar firms.

~~~
mtdewcmu
I'm sure they ruled out the more obvious confounding variables. All else being
equal, you would expect a result like they got, based on the null hypothesis
that expensive CEOs are at least average among CEOs, combined with the
suspicion that their hiring is not a random event. Factor in that the
researchers were undoubtedly biased in favor of the outcome they found, and a
lot of skepticism is justified in making sense of this.

------
aetherson
I don't see how it can simultaneously be the case that:

    
    
      Though Cooper concedes that there could be exceptions at
      specific companies (the study didn’t measure individual
      firms)
    

and

    
    
      How could this be? In a word, overconfidence. CEOs who get
      paid huge amounts tend to think less critically about their
      decisions. “They ignore dis-confirming information and just
      think that they’re right,” says Cooper.
    

If he didn't look at individual people, how can he speak to the psychology of
the effect? Are we suggesting that overconfidence shows up statistically as
differentiated from other poor performance? What is the statistical proxy
being used here?

------
balls187
Interestingly, Peter Thiel wrote that Startup success is correlated with CEO
pay (or the lack there-of)

[http://techcrunch.com/2008/09/08/peter-thiel-best-
predictor-...](http://techcrunch.com/2008/09/08/peter-thiel-best-predictor-of-
startup-success-is-low-ceo-pay/)

~~~
sparkzilla
Thiel's idea is fine if you're a kid eating ramen and living with your
parents, but it is completely wrong for people who already have experience,
and/or have families to support. I actually lost an investment because the
investor thought I should not pay myself _at all_ while trying to build the
business.

~~~
balls187
You're a founder, so none of this should be shocking, early stage startups are
cash strapped, and cash-in-the-bank is the 2nd most valuable commodity a
company has, after it's people. In fact, the #1 reasons startup's will fail,
will because they run out of money.

Thus, a CEO who doesn't treat their cash as the valuable resource it is, is
just putting an unnecessary burden on their company.

Peter Thiel isn't advocating paying yourself nothing. His point (and data[1]
backs this up), that CEO's making a high salary is a pretty good indicator of
Startup that will fail.

If you need a high salary, then being a Founder/CEO probably isn't the right
move. You're putting a burden on the company because of your life style
choices.

Conversely, if you don't pay yourself anything, you're going to spend too much
time dealing with the pain of not making ends meet, instead spending your
energy growing your company.

[1] [http://blog.startupcompass.co/73-percent-of-startup-
founders...](http://blog.startupcompass.co/73-percent-of-startup-founders-
make-50-dollars-000-per-year-or-less)

~~~
Retric
Your making assumptions that don't hold up. If you have 1+M in the bank then
paying yourself nothing is not a major issue. If your company just got 5+M in
funding paying yourself 200k/year is not going to make much difference.

Often paying yourself nothing makes things look better than they are which can
be a bad thing. A slightly profitable 3 person company that pays it's founders
nothing is not actually profitable.

In the end what you make as CEO is often more important from a signaling
standpoint than a survival one. Investors often have the mindset where they
don't invest in companies where the CEO makes more than X or less than Y.

~~~
nostrademons
It's not the money so much as the signalling effect to potential investors.
You presumably have the best knowledge about your own ability to profitably
employ capital. If you take out a lot of money to pay yourself, that implies
that you believe that the business's current cash is worth more to you as
personal income than it is in business equity. What does that say to people
who hold _only_ equity and are supplying the cash?

If I had investors and free business cash flow, I'd pay myself only enough to
break-even on personal expenses. The reason is that I'd also own equity in the
business, and any money invested in the business could presumably earn a
bigger return than if I took that money out of the business and invested it
elsewhere. If that assumption doesn't hold, I have no business being an
entrepreneur, because it is more economically rational for me to take a fat-
paying job at Google or in finance, and then stick my excess savings into
index funds.

~~~
fleitz
Founders don't know how to employ capital profitably because for any
individual startup the best course of action is to return the funds to the
shareholder because it's a virtually assured failure.

However, in aggregate the serious performers outweigh the losses from the 99%
failure rate.

So given that I am about to give 5 years of my time to something that is most
likely a failure I'd like some compensation for my time, just like every VC
takes 2% to flush the LPs money down the toilet, and 20% when they return.

~~~
nostrademons
Think of how terrible that sounds from an investor's perspective. "I don't
know how to employ capital profitably because my best course of action is to
return my funds to you because my startup is a virtually assured failure."
Would _you_ invest in a startup that just told you that?

If you're going to bother founding a startup, you should have some reason to
believe that you are in the 1% that is going to be a success. You might be
wrong in that belief, and that's why startup success continues to be fairly
rare, but if you don't even have a reason to believe that much you might as
well pack up the startup, get a good-paying job, and invest the money you
earn.

~~~
fleitz
Being honest and forthright goes a lot further than you think. Startups have
risk, outline the risk, and ask for what you want.

You don't need the thousands of investors who want you to work for free, you
need one who believes in the business enough to think the CEO is worth being
paid. If the CEO isn't worth being paid the startup isn't worth investing in.

------
digz
I haven't read the paper, just the article. It's possible some of these are
directly addressed, but I would want to know more before any credibility is
given to the conclusions.

Some alternative explanations:

\- The 'lowest paid CEOs', per their definition, are typically the ones who
have the most skin in the game. When you have many CEOs out there with only $1
compensation, and just stock (and not stock grants as the author mention),
they will inevitably be on the bottom. Think Zuckerberg, Google, Apple w/
Jobs, etc. One would expect this highly underpaid group to outperform.

\- The highest paid CEOs are often times the ones dealing with the most
troubled companies. If you were a shareholder of Kodak in 2000 and saw that
digital cameras were coming, would you want to pay for the best CEO possible
to ensure you could harvest the most out of the company? Kodak would still
underperform the market, but maybe they would have underperformed the market
more with inferior management.

\- This is a little technical, but with an experienced manager pulling in big
dollars, it's more likely that this is a well established company and manager
that are well understood by the market. This means that the risk premium
demanded by investors would be smaller resulting in a higher stock price. This
means that the stock has less to move. And on the other hand, more unproven
companies with cheaper managers will have higher risk premia demanded by
investors, resulting in lower stock price and therefore have more room to go
up over time as some of the unknowns are answered.

Ideally we'd need include other variables such as market size and expected
growth (P/E Ratio), CEO share ownership, ex-ante company distress, etc. into
the analysis. Based on the described methodology, it doesn't sound like that
was done.. but again, didn't read the paper itself.

------
carsongross
The conflict-of-interest and self-dealing problems at the c-suite and board
level are absolutely pervasive at this point.

I don't think much will change until investors finally throw in the towel on
the capital gains lottery and start demanding dividends at the point of
pitchforks.

~~~
WalterBright
A simpler, and effective, approach is if you don't like what a CEO is doing,
don't invest in the company.

I recall years ago a CEO stating that he was adjusting the accounting to
reflect numbers "that stock analysts were looking for." He underestimated the
investors - they weren't fooled, the stock price tanked and he went out the
door.

~~~
carsongross
I don't regard that as a particularly viable option: interest rates are low so
the natural alternative investment isn't worthwhile and the problem is
pervasive so it's true in almost all companies large enough to be listed on a
stock exchange.

I'm lucky in that I can invest money in my own business, and afford to take
riskier bets on alternative investments, but that isn't relevant for your
average investor.

Until capital gain return to their appropriate position relative to dividends
(and sane tax law would help here), the shareholder beatings at the hands of
the c-suite and boards will continue.

~~~
WalterBright
> almost all companies

Meaning there are some you can reward with your investment.

> shareholder beatings

I've done reasonably well simply investing in SPY and holding it long term.
Badly managed companies get dropped from SPY because their cap evaporates, and
well managed companies get on it and stay on it.

SPY is extremely relevant to the average investor, and even more so to the
below average investor.

~~~
carsongross
I find is extremely difficult to determine which large companies are self-
dealing, since executive and board compensation is not split out in most
financial statements. (I can't help but think that this is by design.) So,
broadly, I assume all of them are engaged in it unless proven otherwise, which
no companies I'm aware of bother to do.

~~~
WalterBright
> is not split out in most financial statements.

I hate to belabor the obvious, but that means there are companies that
disclose this information, and you can choose (or not) to reward them with
your investment.

~~~
carsongross
No, please, belabor.

So, I do do that, by investing in equity (as much as I do) with high
dividends, since that is orders of magnitude easier to dig up than to find the
few companies that are both interesting as a business and also have
sufficiently transparent quarterly statements. Time is valuable, after all.

However, to get back to the original point, the current environment of board
and c-suite self-dealing will not change until many, many more people invest
and think the way I do. For that to happen, the current bias towards capital
gains, which your generation grew up on, will need to be wiped out
conclusively.

We shall see if that happens.

------
beat
I'm not happy that they led with Larry Ellison as an example. As a Founder-
CEO, his perspective on the company is fundamentally different from the
mercenary CEOs running companies they didn't found or haven't worked at for
decades.

------
bunderbunder
There's an interesting psychological phenomenon I've read about where if you
offer someone a material reward in return for doing a job, it tends to make
them enjoy the job less. In extreme cases, you can take something that a
person really loves to do and make it feel like a burdensome chore for them,
simply by saying, "I'll give you $X to do Y".

I wonder if this story could have something to do with that.

~~~
GregBuchholz
You might enjoy "Drive: The Surprising Truth About What Motivates Us", which
explores the research on that topic.

[http://www.danpink.com/books/drive](http://www.danpink.com/books/drive)

------
endlessvoid94
It's naive to not pay yourself a reasonable salary once you can afford to.

One of the biggest regrets of failed first-time CEOs is that they didn't pay
themselves enough.

~~~
dubcanada
A reasonable salary is not $28 million a year.

~~~
marknutter
It is if you're in high demand. LeBron James, for instance, earns $19MM per
year and generates far more than that in revenues for the Miami Heat and NBA.

~~~
smacktoward
The NBA also has a salary cap for players:

[http://en.wikipedia.org/wiki/NBA_salary_cap](http://en.wikipedia.org/wiki/NBA_salary_cap)

A salary cap for CEOs would be an interesting experiment.

~~~
fallse7en
But whereas the NBA can enforce a salary cap for its players, who would
enforce the salary cap for CEOs?

~~~
Crito
Shareholders presumably, if they cared to.

------
highace
...but the best negotiators, evidently.

------
lnanek2
I realize it is popular to hate CEOs nowadays, but the article sure seems to
be stretching with its conclusions. It seems much simpler and more likely to
simply conclude that companies pay CEOs more than usual and give them large
non-cash incentives when the company is doing badly and they are trying to buy
their way out of a problem. That explains the increased mergers as well.

------
squozzer
The article merely scratches the surface. We can probably agree that
corporations have certain structural flaws, but I doubt making a CEOs life
more burdensome - who would take the job under a claw-back regime without some
kind of financial protection? - will improve the picture.

One line of inspiration come from government - maybe a bicameral board - one
for managing quarterlies, the other for longer horizons - might fix some
issues.

Another might be to limit cronyism - boards seats given to CEO appointees, or
limiting the number of board seats a person can hold.

------
QuantumChaos
People need to take the efficient market hypothesis seriously when using stock
prices for things like this.

The _announcement_ of a new CEO (or more realistically, the rumors preceding
the announcement) already given the market a chance to adjust based on their
expectations of the CEO. So what the study really shows is that highly paid
CEOs tend to perform less well than the market would expect. This might be
because they perform worse. It might also be because they perform better, but
not by as large a margin as the market expected.

------
stretchwithme
One thing that could improve performance: only let CEOs sell their stock
gradually over a 5 year period after the exercise their options.

Too much risk for the CEO? He's the one with the most influence over future
performance. If he's putting the company on a good long term footing and
chooses a good successor, he'll do fine.

If we incent CEOs to think long term, its more likely they will. CEOs that are
founders or that have huge investments in their company's stock already tend
to think long term.

------
njx
Check out CEO compensation for Fortune 500
[https://my.infocaptor.com/dash/mt.php?pa=ceo_compensation_20...](https://my.infocaptor.com/dash/mt.php?pa=ceo_compensation_2012_5159dc6ecb22b)

------
pistle
Poor performing companies make bad decisions. One of those decisions may be
how much to pay a CEO. The causation arrow may be going the wrong direction.

------
quadrangle
The biggest problem is shown by the article saying that the results are
"counter-intuitive". That certainly isn't my experience.

------
sambeau
My take from this: it highlights the worst performing _boards_ – i.e. those
that compensate highly despite poor performance.

------
apalmer
Ehh this isnt really rocket science. If you take someone who is specifically
focused on their own benefit over that of the company, and you have that
person run your company... they are going to make choices that benefit them
more than your company...

I wouldnt say CEOs arent worth it, but the incentives are completely perverse.

~~~
Peaker
This kind of reasoning after-the-fact is easy.

If it was the opposite, it would also not really be rocket science: "Good
CEO's have immense values for companies. So of course companies would pay a
lot more for those CEOs that do a good job -- it is worth so much to the
company."

You can't really make useful predictions with that kind of reasoning.

------
moron4hire
How does one go about becoming a CEO? What sort of career progression does it
take?

~~~
FLUX-YOU
Look up CEOs on Linkedin, look at their history. Maybe shoot them some
messages. Networking is necessary anyway.

My uncle, who runs a resort as CEO, started as a bellhop with no college and
just climbed in rank (I'm glossing over because I don't know the entire
story).

I'm pessimistic and feel like that progression is very, very rare today in
larger companies with everyone trying to hold on to middle-class positions as
they dry up (so says the news). Hard to advance when there's no room. You'd
also likely hit a ceiling today without a degree instead of in the past.

At the same time, I make a grand $15/hr, so I can only glimpse what I've heard
from him. Definitely dig and try to reach out.

------
mantraxB
> "The more CEOs are paid, the worse the firm does over the next three years,
> as far as stock performance and even accounting performance"

Yeah well this entire study is invalidated by using stock performance as the
lazy way to measure CEO performance.

Expensive CEOs are typically expensive, because they're hired to fix a company
that everyone knows is going down. The riskier the company, the more the stock
is expected to go worthless, the more you get paid in cash for taking on the
job.

So it's expected that if you look for expensive CEOs you'll be seeing
stock/accounting performance going down in short to mid term, because
recoveries, whether successful or not, take time. They take years.

Also are you honestly counting CEOs who get millions in stock and $1 pay as...
just getting $1 in pay? How stupid are you.

~~~
josu
I can't agree with you more. This would have been a nice study if it didn't
reach any conclusions; just laid the data, pointed out all the possible
reasons why their analysis could be wrong and paved the way for a better
study.

One example, their data only covers from 1994 to 2011.

PS: Direct link to the study
[http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1572085](http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1572085)

~~~
ceejayoz
The standard format for a scientific paper includes a discussion section,
where you're supposed to draw such conclusions and interpret the results and
their significance.

~~~
josu
Then this document should not be called a "scientific paper" or/and should
never be published.

~~~
ceejayoz
Sorry, what? It shouldn't be called a scientific paper because it follows the
standard format for one?

------
marknutter
"The Highest-Paid CEOs Are The Worst Performers, New Study <Which Is in Line
with People's Assumptions> Says"

~~~
skndr
This is a Common Sense Fallacy[0].

Playing devil's advocate, the result could have been that CEO pay was very
well correlated with performance. The company doing well can justify a higher
compensation.

Of course, this is probably the argument that gets used.

[0] [http://corkskeptics.org/2011/05/03/the-common-sense-
fallacy/](http://corkskeptics.org/2011/05/03/the-common-sense-fallacy/)

