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The best-paid CEOs tend to run some of the worst-performing companies and vice versa—even when pay and performance are measured over the course of many years, according to a new study.

The analysis, from corporate-governance research firm MSCI, examined the pay of some 800 CEOs at 429 large and midsize U.S. companies during the decade ending in 2014, and also looked at the total shareholder return of the companies during the same period.

MSCI found that $100 invested in the 20% of companies with the highest-paid CEOs would have grown to $265 over 10 years. The same amount invested in the companies with the lowest-paid CEOs would have grown to $367. The report is expected to be released as early as Monday.

The results call into question a fundamental tenet of modern CEO pay: the idea that significant slugs of stock options or restricted stock, especially when the size of the award is also tied to company performance in other ways, helps drive better company performance, which in turn will improve results for shareholders. Equity incentive awards now make up 70% of CEO pay in the U.S.

Source: Best-Paid CEOs Run Some of Worst-Performing Companies – WSJ

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After taking some big hits, active managers may be about to give some licks back.

Beating the market has always been hard for the pros. Lately it has been even harder. In the decade that ended in 2015, an average of just 37% of large-cap mutual funds outperformed the Russell 1000 in any given year, according to Bank of America Merrill Lynch. In the first seven months of this year, only 14% outpaced the benchmark.

Costs are part of it, but there are other problems. The number of Americans who own individual stocks has steadily declined since the 1990s, leaving fund managers with fewer patsies at the poker table to take chips away from. The crush of cash entering index funds has made stock selection less effective.

Source: Stock Pickers’ Very Bad Year – WSJ

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Tech investors are a discerning bunch these days—a harsh reality that is pressuring Apple Inc. [stckqut]AAPL[/stckqut] more than it deserves.

In this yield-starved environment, stock investors are attracted to steady income. This would benefit Apple, except that like other former highfliers, it has been tossed out by investors. The iPhone giant’s shares have slid 6% this year and 21% over the past 12 months. While some of that is justified as iPhone sales have slowed, the selloff also looks overdone.

Much of the bearish thesis is due to weakening iPhone sales, which account for more than half of revenue. The iPad isn’t selling as well as it used to and the jury is out on the Apple Watch. Tech investors are allergic to anemic growth, which explains why the tech-heavy Nasdaq has lagged behind the Dow industrials and S&P 500.

Still, Apple has been punished more than enough. The iPhone slump appears priced in. And while the next iPhone, expected later this year, likely won’t be a significant upgrade, there is optimism that sales growth will soon bounce back. Analysts forecast iPhone unit sales will rise 5% for fiscal 2017, which ends next September.

Apple is the sort of stock that investors love these days. It plans to spend $250 billion on dividends and buybacks by March 2018, which would boost earnings per share and yield. Already, Apple’s 2.3% dividend yield is well above the 10-year Treasury yield.

Apple remains wildly profitable, too. Its $10.52 billion profit in the March quarter easily surpassed combined profits of Alphabet Inc. [stckqut]GOOGL[/stckqut], Amazon.com Inc. [stckqut]AMZN[/stckqut] and Facebook Inc. [stckqut]FB[/stckqut]

Source: Apple Is Ripe for a Rally

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Two years ago, Google spent over half a billion dollars for the tiny artificial intelligence startup DeepMind. Since then, the unit has walloped Atari video games and beaten an impossible board game.

Impressive stuff, that. But those AI demonstrations have yet to spell actual revenue. Until now — although the efforts are helping Google save money on its most expensive part.

DeepMind chief Demis Hassabis told Bloomberg that his unit recently began applying its advanced AI to Google’s data centers, finding ways to reduce the company’s sizable energy bill.

Google started using machine learning for its data centers two years ago, searching for ways to reduce costs for one of the company’s top expenses. A month ago, it aimed the more specialized AI tools from DeepMind at the problem of cooling these server farms. That cut the energy needed for cooling by 40 percent, the company said.

It didn’t offer a dollar figure for that, but it’s safe to assume that it means hundreds of millions in savings over the long haul.

Source: Google has found a business model for its most advanced artificial intelligence – Recode

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Starbucks Corp. [stckqut]SBUX[/stckqut] said Monday that it is expanding health-care benefits for all eligible part-time and full-time workers. A new online platform created with Aon PLC [stckqut]AON[/stckqut] will offer as many as six carriers and five levels of coverage. Workers could save up to $800 annually by selecting a plan that better suits their needs, Starbucks said in a statement. Starbucks staffers will also have access to Healthcare Advocates to help choose a health care plan.

The company will continue to cover about 70% of premium costs and 100% of preventive care services. Starbucks employs more than 160,000 workers and has been providing health care to eligible workers since 1988. Starbucks shares are down 0.2% in Monday trading and 4.5% for the year so far. The S&P 500 is up 6.1% for the year to date.

As the economy improves and there is more competition for workers, expect this to turn into a trend.

Source: Starbucks expands health-care benefits for all eligible part-time and full-time workers