July 15, 2010
Study: As CEOs Make More, They Treat Employees Worse
– Broc Romanek, CompensationStandards.com
I read about this new study in this NY Daily News article of all places, which pulled it from the Huffington Post. I’m not sure how these Professors evaluated what seems like such a subjective topic, but there you have it. Here is an excerpt from the article:
The study, conducted by professors at Rice University, Harvard University and the University of Utah, found that “increasing executive compensation results in executives behaving meanly toward those lower down the hierarchy.”
The authors believe that this increase in meanness is due to an increase in power: As executives get paid more, they get a heightened sense of power, and “more power leads managers to mistreat subordinates more and evaluate them more unfavorably,” the findings suggest. This meanness gets worse as the gap between CEO compensation and the pay of lower-level employees widens, according to the study, called “When Executives Rake in Millions: Meanness in Organizations.”