http://finance.yahoo.com/news/surprise--paying-ceos-for-stock-performance-doesn-t-help-companies--cornell-183854141.html
It turns out offering CEOs huge bonuses to boost shareholder returns doesn’t actually work, according to a new study from Cornell University.
The analysis, done in conjunction with consultants Pearl Meyer & Partners, examined a decade’s worth of data from every company in the S&P 500 (^GSPC). It compared companies that offer their top brass a total shareholder return (TSR) plan to those that don’t and found the increasingly popular pay plans haven't made significantly boosted any of a number of key metrics.
Total shareholder return is how well an investment in a company has done over a given period. It's a combination of the stock's price change and dividends paid. With TSR plans, managers are rewarded with shares, options, or even cash to give them a stake in how well the stock does.