Smith Business Close-Up: Setting CEO Pay – Executive
Thursday, Oct. 1, 2009, 7:30 p.m.
Sunday, Oct. 4, 2009, 7:30 a.m.
Monday, Oct. 5, 2009, 4:30 a.m.
Setting CEO Pay – Executive Compensation
In 1980, the average CEO’s compensation was about 42 times what the average
worker was paid, and by 2007, CEOs received about 344 times the average worker
salary. There’s a debate over whether this ballooning of executive compensation
is a failure of corporate governance, evidence of abuse of power, or just a
reflection of market forces -- that top CEOs must be paid top dollar, or they’ll
take their (presumably irreplaceable) talents to other organizations. But how do
companies arrive at these astronomical sums?
In this edition of Smith Business Close-Up with the University of
Maryland’s Robert H. Smith School of Business,
Michael Faulkender, assistant
professor of finance, shares his findings from research into executive
compensation practices and how firms decide what to pay their CEOs. Faulkender’s
research focuses on empirical corporate finance, primarily in the areas of
capital structure, risk management, corporate, liquidity, and executive
compensation. His research has received recognition and awards from top academic
journals and he has been awarded a research grant from the FDIC Center for
Financial Research, which was accompanied by an appointment to serve as a fellow
of the center during the term of the grant. He is a member of the American
Finance Association, the Western Finance Association, and the Society of
Smith Business Close-Up is co-produced by the Robert H. Smith School of
Business and Maryland Public Television. The television segment focuses on the latest thinking in business management,
and features in-depth interviews with Smith School faculty and other members of
the school’s community of business leaders.
Where to watch
Smith Business Close-Up can be seen bi-weekly on Maryland Public
Television's Your Business and Money. The program airs at 7:30 p.m. on
Thursdays and is repeated the following Sunday at 7:30 a.m. and Monday at 4:30
a.m. on public television stations throughout Maryland and the Washington, D.C.,
metropolitan region, including:
WMPB-TV (Ch. 67), Baltimore
WMPT-TV (Ch. 22), DC metro/Annapolis
WCPB-TV (Ch. 28), Salisbury
WFPT-TV (Ch. 62), Frederick
WWPB-TV (Ch. 31), Hagerstown
WGPT-TV (Ch. 36), Oakland