The Dove takes flight, page-23

I read this on MotleyFool.com last week and thought of GRB.

Two things never fail me in investing. One is the constant reminder that what works is counterintuitive. The other is that I rarely go a day without reading something that utterly shocks me.

Here's a good example, from The Wall Street Journal in July:

$100 invested in the 20% of companies with the highest-paid CEOs would have grown to $265 over 10 years. The same amount invested in the companies with the lowest-paid CEOs would have grown to $367.
Amazing.

The stat is from a study from MSCI, which ranked CEO pay and total shareholder returns from 2005 to 2015. My first thought was that this makes sense, because the highest-paid CEOs tend to come from the largest companies, and large companies in general have lagged small-cap stocks over the last decade. But the study's authors removed the largest companies from the sample and found similar results. Higher CEO pay, on average, is correlated with lower returns. Ten years isn't a long time — I'd love to see a study spanning 30 or 50 years — but it's still a staggering statistic.