Companies that use non-standard metrics for executive comp are overpaying managers, study finds

U.S. companies that use nonstandard numbers to calculate executive compensation are overpaying their top managers, according to a new research report.

The working paper, “High Non-GAAP Earnings Predict Abnormally High CEO Pay,” by Nicholas Guest of Cornell University’s Samuel Curtis Johnson Graduate School of Management and S.P. Kothari and Robert Pozen at the Massachusetts Institute of Technology’s Sloan School of Management, finds that non-GAAP earnings, or those that do not conform with Generally Accepted Accounting Principles, exhibit a significantly positive relationship to CEO pay. Read Full Article - MarketWatch, April 5, 2019