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Yes, but they are not comparing future performance to past performance, but rather to that of similar firms.
by jsw97 12y ago
Yes, but they are not comparing future performance to past performance, but rather to that of similar firms.
- mtdewcmu 12y agoI'm sure they ruled out the more obvious confounding variables. All else being equal, you would expect a result like they got, based on the null hypothesis that expensive CEOs are at least average among CEOs, combined with the suspicion that their hiring is not a random event. Factor in that the researchers were undoubtedly biased in favor of the outcome they found, and a lot of skepticism is justified in making sense of this.