NEW YORK--(BUSINESS WIRE) --A BusinessWeek study of companies in the Standard & Poor's 500-stock index finds that independent compensation committees are now more likely to dole out raises when the stock tanks than committees stacked with insiders. Nearly a decade ago, that wasn't the case.

Corporate governance leaders say pay and performance are diverging because the supply of the most desirable CEO candidates, those already at the helms of large companies, is limited. Meanwhile, demand, fueled by the profusion of Internet start-ups, has shot up. Examples of lavish compensation for less-than-stellar performance are common. Many companies have been quicker to give underperforming CEOs the boot. But the new numbers suggest a second trend: a willingness on the part of boards, whether stacked with insiders or not, to reward laggard CEOs lavishly, almost until the end.