CEOs rewarded for wrong kind of growth, Rotman paper finds
Toronto – Growth is good, right?
Not always.
But compensation committees still tend to reward CEOs when their companies grow due to investments – even though that has been found to hurt long-term shareholder value – rather than only rewarding growth due to improved profitability, says a paper co-authored by a professor at the University of Toronto's Rotman School of Management.
The practice sends CEOs a message to grow at all costs, while hurting chances for companies to further improve shareholder value. Still, corporate boards may not realize what they're doing, ...





