What You Make = Who You Know

Being "well connected" has long been an aspiration for most people, whether it is to help score tickets to the big game, get a kid into a top school, or give a boost to a career. It turns out, even CEOs, who already are at the peak of power, have an interest in well-connectedness, perhaps even more than most, at least in terms of absolute dollars.
Based on public data collected for all US S&P 1,500 firms between 1996 and 2004, a recent study conducted by Ilan Guedj and Amir Barnea of University of Texas–Austin, find that firms that have more connected directors award their CEOs a higher compensation. CEO of a firm that is in the top 1/5 of connected firms receives a 10% higher salary and 13% higher total compensation than a CEO of a firm that is in the bottom 1/5.


Younger Leo said...

How to wellconnected?

Regards. Younger Leo Blog

Jen said...

Makes you wonder who your friends are, huh?

Proma said...

no surprise there - self market and keep eyes open for opportunity