Forward Thinking: Identifying Strong Leaders; Building a Culture of Trust

October 13, 2016

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[graphicstock]

Higher CEO Pay Often Equates to Lower Employee Approval

Highly paid CEOs have significantly lower approval ratings from their employees than CEOs who are paid less, according to a new Glassdoor survey. Overall, researchers found that lower-paid CEOs had the highest approval marks, while higher-paid CEOs had the lowest approval ratings.

As of 2014, the average CEO received 204 times the pay of a median worker at S&P 500 companies. At all of the 70,000 companies sampled, CEOs made an average yearly salary of $12.3 million.

Pay raises are mainly due to merit, the study found, but sometimes CEOs give themselves a raise. When overall employee satisfaction is greater at a company, the effect of poor CEO approval ratings is lessened, the study says. CEOs who also founded their companies had 3.2 percent higher approval ratings than those hired externally or promoted internally. Gender didn’t have a statistical impact on CEO approval ratings.

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