Footnote on CEO Pay

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Karen and Butler, I agree that high CEO salaries can be a problem for firms, and can reflect owner-manager conflict, but it’s worth pondering Steve Kaplan’s evidence that compensation for skilled professionals in a variety of positions — hedge-fund managers, attorneys at prestigious law firms, professional athletes — has also risen dramatically in recent years, and by about the same rates as CEO pay. So trends in the market for corporate executives may simply track those in the labor market for other highly paid, highly skilled managers or performers, and may have little to do with differences between owner-managed and professionally managed firms.

5:03 am on October 4, 2009