Professor Dirk Jenter's research into CEO compensation

CEO pay is a hugely important and often controversial subject, with many factors influencing and constraining compensation packages. Professor Dirk Jenter of the LSE Department of Finance is exploring new ways to investigate a subject that has a real impact on the success and public perception of businesses.

In his own words: "A hopefully useful finding for practitioners is that there is genuine disagreement between directors and institutional investors about both the primary goal of setting CEO pay and about the challenges faced by boards. This suggests a need for better communication between boards and shareholders and for an open discussion about shareholders’ role in the pay setting process. With most directors agreeing that long-term shareholder value maximization is the goal, it should be possible to reach a consensus on what optimal CEO pay looks like."

Watch the video below to learn more about the study conducted by Prof. Jenter along with co-authors Alex Edmans and Tom Gosling from London Business School.