In the ‘size of stakes’ view quantitatively formalised in Gabaix and Landier (Quarterly Journal of Economics, 121(1):49–100, 2008), CEO compensation reflects the size of firms affected by talent in a competitive market. The years 2004–11 were not part of the initial study and offer 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 2007–9, firm value decreased by 17%, and CEO pay by 28%. During 2009–11, firm value increased by 19% and CEO pay by 22%.