The MBA Myth and the Cult of the CEO

In 1990, Harvard Business School professor Michael Jensen co-wrote an article making the then-bold claim that CEO compensation should be tied to stock price performance. Jensen was concerned that this meant America’s “best and brightest” leaders were not going to be running America’s largest companies — and that corporate America needed to increase CEO compensation to lure more Harvard MBAs into corporate management careers. MBA programs simply do not produce CEOs who are better at running companies, if performance is measured by stock price return.

Source: www.institutionalinvestor.com