Readers of Going Private will be familiar with my many critiques of the critics of executive pay. Hardly a week passes without another bit of hand wringing over the W2 forms of public company CEOs. These are usually accompanied by cute little graphics of fat cats with overflowing bags of money. Any number of sound bites pointing to the rising inequity in CEO pay are cited by plastic "financial reporters." Never mind what scholars on the subject say. A loose connection to the facts seems a required line on the resume of executive pay critics. So it doesn't surprise me that it is only the Economist that has managed to pick up on the rather compelling view on the subject of no less a luminary than Steven Kaplan, the University of Chicago professor and economist.
Kaplan points out via the Economist (subscription required) and his published study that effectively the only way to show chief-executive pay on the rise since 2000-2001, the years Kaplan believes it peaked, is to "combine forward-looking and backward-looking measures of pay in any year." I won't insult the statistical acumen of Going Private's readers by outlining how great a farce such a method would be.