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The Two Sides Of Ceo Pay Injustice: A Power Law Conceptualization Of Ceo Over And Underpayment, Herman Aguinis, Geoffrey P. Martin Dr, Luis R. Gomez-Mejia Dr, Ernest H. O'Boyle, Harry Joo
The Two Sides Of Ceo Pay Injustice: A Power Law Conceptualization Of Ceo Over And Underpayment, Herman Aguinis, Geoffrey P. Martin Dr, Luis R. Gomez-Mejia Dr, Ernest H. O'Boyle, Harry Joo
Geoffrey P Martin
Purpose - The goal of our study was to examine the extent to which CEOs deserve the pay they receive both in terms of over as well as underpayment.
Design/methodology/approach – Rather than using the traditional normal distribution view in which CEO performance clusters around the mean with relatively little variance, we adopt a novel power law approach. We studied 22 industries and N = 4,158 CEO-firm combinations for analyses based on Tobin’s Q and N = 5,091 for analyses based on return on assets. Regarding compensation, we measured the CEO distribution based on total compensation and three components of …