Berk and Green (2004) have made a strong theoretical argument for why past performance should not predict future performance. There are two possible economic explanations that are consistent with their model: increasing expenses or increase in size following good performance along with...

We provide new evidence on the debate whether CEOs in public U.S. firms are significantly overpaid using their counterparts in private U.S. firms over the period 1999 to 2008. Using public and private firm CEO pay data made available through mandated SEC disclosures, we first show that after...