In the `size of stakes' view quantitatively formalised in Gabaix and Landier (2008), CEO compensation reflects the size of rms aected by talent in a competitive market. The years 2004-2011 were not part of the initial study and oer a laboratory to examine the theory with new positive and negative shocks. Executive compensation (measured ex ante) did closely track the evolution of average firm value, supporting the `size of stakes' view out of sample. During 2007 - 2009, rm value decreased by 17%, and CEO pay by 28%. During 2009-2011, firm value increased by 19% and CEO pay by 22%.