New study: Why CEO pay matters

Breakthrough Research Examines Perceptions of Fairness; How Over- or Underpayment Cascades to Lower Organizational Levels

FOR IMMEDIATE RELEASE

Media Contact:

Barry List INFORMS (443) 757-3560 Barry.list@informs.org

Doug Russell or Chuck Tanowitz Schwartz Communications (781) 684-0770 informs@schwartz-pr.com

HANOVER, MD, September 25, 2006—Executive compensation scholars have released new, breakthrough research analyzing perceptions of fairness in executive pay and how CEO over- or underpayment cascades down to lower organizational levels.

The paper, “Overpaid CEOs and Underpaid Managers: Fairness and Executive Compensation,” looked at data from over 120 firms over a five-year period and is the most comprehensive study of its kind to be conducted. Authored by James B. Wade at Rutgers University, Charles A. O’Reilly, III at Stanford’s Graduate School of Business, and Timothy G. Pollock at Pennsylvania State University’s Smeal College of Business, it will be published in the September/October 2006 issue of Organization Science.