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Headlines and CEO pay

Filed in archive executive pay by leon on December 12, 2007

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The media spends a lot of time bagging CEOs for outrageous salaries and perks. But a recent study suggests the media might be just as much to blame.

The study by University of Colorado researchers, reported here, examined more than 1500 companies and CEOs from 1997 to 2005 and how often they appeared in Business Week, the New York Times, Wall Street Journal and other major national business publications. And the results were extraordinary.

According to Ph.D. candidate Markus Fitza and associate professors Mathew Hayward and Kai Larsen, every time the CEO's name was mentioned in a major publication, the variable compensation rose by more than $650,000. And getting your mug shot or name on the cover of a major business publication was worth an extra $1.1 million.

Indeed, it didn't even matter if the company was a dog. For each percentage point a company underperformed its peers, the six-digit increase in CEO pay that resulted was only reduced by $2800.

The study might say something about the media. But then, it would say even more about the quality of boards that get sucked in by the publicity.


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Permalink: Headlines and CEO pay
Tags: Markus  Fitza  and  associate  professors  Mathew  Hayward  and  Kai  Larsen  CEO  compensation  media  coverage   

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