Executive Pay vs Returns

Physician's Money Digest, April15 2005, Volume 12, Issue 7

Inverse proportion:

This may not come as a surprise, butapparently the more money a company'sexecutives are paid, the worse its stockperforms. A 1%salary increase for the top five executivesof a corporation is related to an averagedrop of 0.02% in shareholder returnsover the next year and an averagedecrease of 0.01% over 3 years. To investigateyour stocks'companies, take a lookat their annual proxy statement filed withthe SEC (202-942-8088; www.sec.gov).Visit the SEC Web site and click on"Filings & Forms (EDGAR),""Searchfor Company Filings,"and "Companiesand Other Filers,"and then conduct asearch for Form DEF 14A.