A new study of UK businesses finds that compensation consultants, which are supposed to make sure CEO pay is “properly aligned with shareholder interests,” actually result in higher-paid CEOs.
Color us shocked. Really.
According to BNET, when a firm adds a compensation consultant, CEO pay rises by an average of 8.5 percent.
At companies with one consultant, median CEO income was 1.239 million pounds. At companies with three consultants, median CEO income was 1.58 million.
The possible problem? Compensation consultants also consult on other issues. Cutting the pay of the guy who’s cutting your check isn’t a way to win repeat business.