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Eugen Tarnow

 

    Analytical Thoughts

    No Correlation Between Executive Pay & Shareholder Return

    Eugen G Tarnow  June 24 2015 10:04:13 AM
    By Eugen Tarnow, Ph.D.
    Avalon Business Systems, Inc.
    http://AvalonAnalytics.com

    Today's Wall Street Journal covers executive pay.  The journalists forgot the "line".  

    We generated it and it appears in the graph below of executive pay versus shareholder return.  The line is dotted and the number we were all looking for is indicated above.  R2=0.0001.

    In other words, there is no correlation between executive pay and shareholder return.

    Image:No Correlation Between Executive Pay & Shareholder Return