Pay For Performance But Not Too Much Pay: The American Public's View of CEO Pay

Stanford Closer LOOK series
pay for performance... but not

too much pay
The American Public’s View of CEO Pay
By David F. Larcker and Brian Tayan
November 25, 2019
introduction
percent do not. Responses are remarkably similar across political
Among the controversies in corporate governance, perhaps none party affiliation and household income levels (see Exhibit 1).
is more heated or widely debated across society than that of CEO Responses are also stable over time. A 2016 survey by the Rock
pay. Americans might not have strong opinions about chairman Center found that 83 percent of Americans believed CEOs to be
independence, proxy advisory firms, staggered boards, or dual- overpaid relative to the average worker.2
class shares, but they almost always have an opinion (usually CEO pay, however, is not constant across companies. It
negative) about how much CEOs are paid. While researchers and varies based on size, profitability, and organizational complexity,
practitioners argue over concepts of labor market efficiency, pay and therefore we might expect that views of pay will depend on
for performance, and shareholder alignment, to members of the what company is being evaluated. For example, median total
public the issue of CEO pay boils down to a personal assessment compensation among S&P 500 companies is $12 million, while
of whether any executive deserves to be paid so much money. median total compensation among Russell 3000 companies is
That said, corporations are not monolithic entities. They vary a much lower $4.1 million. Within the Russell 3000, company
by size, industry, and performance, and it is not practical to assume market capitalization at the 90th percentile is $23.6 billion and
that CEOs—no matter what pay they are offered on average—will CEO pay is $13.3 million; at the 10th percentile, those figures are
earn the same amounts in all circumstances. To the American $945 million and $1.0 million, respectively. That is, as company
public, how should pay vary with size and performance? Under size increases 25-fold, pay increases 13-fold (see Exhibit 2).
what circumstances do CEOs deserve higher pay, and in those The typical American agrees that CEO pay should vary with
cases, how much higher should it be? When value is created, how company size. However, they believe the relation between size
much of that value should be paid as compensation, and what are and pay should be much lower than it is in practice. For example,
the implications given the incredible size and market valuation of a typical respondent believes the CEO of a large company by sales
America’s largest companies? ($25 billion) should be paid only 50 percent more than the CEO of
To gain insight into these issues, the Rock Center for a smaller company by sales ($25 million)—despite a 1,000-fold
Corporate Governance at Stanford University conducted a survey difference in revenue between the companies. Only 4 percent of
of the American public asking their views on CEO pay. The views
1
Americans believe the CEO of the larger company should receive
that American citizens have on CEO pay is centrally important 10 or more times the compensation of the CEO of the smaller
because public opinion influences political decisions that shape company (see Exhibit 3).3 Similarly, Americans believe the CEO
tax, economic, and regulatory policy. These, in turn, have a of a company with 10,000 stores should be paid 50 percent more
significant impact on the incentives offered to senior executives than the CEO of a company with 10 stores—also a 1,000-fold
who make the investment and capital allocation decisions that difference in size. Only 7 percent believe the CEO of the larger
determine the productivity of the general economy and therefore company should be paid at least 10 times more (see Exhibit 4).
the standard of living of average Americans. While the median results are the same in both scenarios, the
distribution of responses is skewed higher in the second scenario,
americans and ceo pay suggesting that size as measured by operational complexity (store
Not surprisingly, most Americans do not have a favorable view count) is a more salient factor to Americans than revenue.
of CEO compensation. Eighty-six percent of respondents believe Furthermore, Americans believe that CEOs should be paid
the CEOs of large, public U.S. companies are overpaid; only 14 more for growth. Fifty-four percent believe the CEO of a company
Stanford Closer LOOK series 1

Pay for Performance... But Not Too Much Pay
that is growing and hiring U.S. employees should be paid more many Americans believe other individuals within an organization
than the CEO of a company that is shrinking and laying off U.S. can be responsible for a larger portion of value creation than the
employees (assuming they are in the same industry and similarly CEO, although opinions on this question are mixed.
sized today), while only 31 percent believe they should be paid The public is also divided over the extent to which CEOs are
the same (see Exhibit 5). Similarly, two-thirds of Americans (64 promoted because of effort, luck, or connections. That is, what
percent) believe founders who have presided over the growth fundamentally drives the career success of the CEO? Thirty-nine
of their companies deserve higher pay than professional CEOs percent believe CEOs are promoted because they worked harder
of similarly sized companies who are promoted to the job (see than others, while 27 percent disagree. Thirty-two percent believe
Exhibit 6). This suggests the public places a high value on the act they were promoted because they were lucky; 31 percent disagree.
of job creation in assessing CEO pay, which of course directly And an overwhelming percentage (61 percent versus 8 percent)
affects the economic prospects of workers. believe CEOs had connections who helped them get to the top (see
Still, the disconnect between observed pay levels and the Exhibits 10-12).
public’s view of pay is stark. Prior studies find that CEO pay While the American public is critical of CEO pay levels,
increases approximately $0.3 for every $100 change in shareholder they are much less critical of CEO perquisites. The majority of
wealth, but the public believes it should increase only $0.05 for Americans believe it is reasonable to provide the CEO a wide
that same change.4 This might be due to the fact that the public variety of perks, including a company-provided private car
views compensation changes through the economic practices or jet for work, personal financial advisor, personal security,
that exist across the bottom and middle of most organizations, supplemental pension, guaranteed severance, and membership to
where promotions are compensated with 10 percent, 15 percent, a local country club. Among these, the use of a private jet for work
and 20 percent raises, rather than the economic practices that we is considered the most reasonable, and guaranteed severance and
witness at the top of organizations where compensation scales country club membership are considered the least reasonable.
significantly with size and profitability. Alternatively, it might be Surprisingly, the seemingly controversial issue of using a private
that Americans do not believe CEOs are responsible for much of jet for work ranks in the middle in terms of appropriateness:
the value creation at their companies. To this end, when given 70 percent say it is always or sometimes appropriate to provide
a hypothetical situation of a CEO who creates $100 million in a private jet for work travel, while only 30 percent say this perk
value through his or her management, respondents are willing should never be provided (see Exhibit 13).
to share $10 million, or 10 percent of this value in compensation Opinions of CEO pay become only modestly more favorable
(median response). However, when asked about a company that when respondents are given actual data about the size and
is simply worth $100 million more at the end of the year than at profitability of the average large U.S. company and the amount of
the beginning of the year, respondents are willing to give only pay and accumulated equity that CEOs have earned at these firms.
$500,000 as compensation, implying that CEOs are responsible When told that the average large company in the U.S. earned $2
for only 5 percent of value creation (see Exhibit 7).5 The research billion in profit last year and its CEO was paid $12 million, only
evidence on this question is very mixed. Prior studies conclude that 70 percent believe CEOs are overpaid—a 16-point improvement
CEOs are responsible for as little as 4 percent and as much as 36 over the unprompted question (see Exhibit 14). When told the
percent of company performance. Corporate directors estimate
6
average large company has a market value of $45 billion and its
that CEOs are responsible for 40 percent of performance.7 CEO accumulated $50 million in company stock over their career,
Americans also hold varying opinions about how CEOs 72 percent say CEOs are overpaid (see Exhibit 15).
should be compensated relative to other highly paid professionals. Finally, in recent years several wealthy executives have
Sixty-two percent of the public believe the CEO should always pledged to donate large portions of their accumulated wealth to
be the highest paid person in a company, whereas 38 percent do charitable organizations, rather than leave it to family members
not (see Exhibit 8). However, only 43 percent believe the CEO of at their death.8 To test whether the public’s view of CEO pay is
a movie studio should make more than $10 million per year if an moderated based on these practices, we asked Americans for their
important actor at that movie production company makes $10 opinion of CEOs who donate much of their wealth. Responses
million per year; and only 40 percent believe the CEO of a sports are mixed, including equal parts admiration and cynicism. For
team should make more than $10 million if an important athlete example, respondents are as likely to say CEOs who donate most
on that team makes $10 million per year (see Exhibit 9). That is, of their wealth are a good role model for others (34 percent) as

cited, the statistics cited in this Closer Look are derived from that survey.
they are to say CEOs just want to reduce their taxes (31 percent). 2
For a fair comparison, responses were adjusted to exclude “I don’t know.”
They are also as likely to say CEOs donate their wealth to charity The unadjusted data in the 2016 survey were 74 percent overpaid, 16
because they feel strongly about addressing important social or percent not overpaid, and 11 percent “I don’t know.” See, Rock Center
for Corporate Governance at Stanford University, “Americans and CEO
environmental problems (27 percent) as they are to say that CEOs
Pay: 2016 Public Perception Survey on CEO Compensation,” (2016).
have probably already given a lot of money to their children (30 3
Calculated as the percent of respondents who believe the CEO should
percent). A large minority (25 percent) say that CEOs who donate be paid “more” (as opposed to the same or less) multiplied by the percent
who believe pay should be 10 or more times larger (8 percent).
their wealth do so to improve their reputation (see Exhibit 16). 4
Michael C. Jensen and Kevin J. Murphy, “Performance Pay and Top-
Management Incentives,” Journal of Political Economy (1990).
Why This Matters 5
Data in this second scenario from: “Americans and CEO Pay: 2016
Public Perception Survey on CEO Compensation,” (2016).
1. Survey data of the American population shows widespread 6
Using a small sample of 12 British firms, Thomas (1988) finds that CEOs
negative perceptions of CEO pay, due in part to the common are responsible for between 3.9 percent and 7 percent of the unexplained
belief that CEOs are not responsible for significant portions variance in profits, sales, and profit margins across companies. Mackey
(2008) uses a moderate sample of 51 firms whose CEOs worked for
of the value creation and performance of their companies. Are
more than one firm in the sample; she finds that CEOs account for 29.2
these views wrong? Or are the corporate directors who approve percent of the unexplained variance in company profitability (ROA) and
pay levels wrong? How can our understanding of pay and value 12.7 percent in business-segment profitability. Hambrick and Quigley
be improved and the controversy over CEO pay resolved? (2014) use a sample of 830 CEOs and 315 companies and find that
CEOs account for 35.5% of firm outcomes (ROA). See Alan B. Thomas,
How might companies effectively communicate that CEO pay
“Does Leadership Make a Difference to Organizational Performance?”
is really due to shareholder wealth creation and employment Administrative Science Quarterly (1988); Alison Mackey, “The Effect
growth by the CEO? of CEOs on Firm Performance,” Strategic Management Journal (2008);
2. The American public understands that CEO pay is, and Donald C. Hambrick and Timothy J. Quigley, “Toward More Accurate
Contextualization of the CEO Effect on Firm Performance,” Strategic
should be, related to the size, growth, and value of companies.
Management Journal (2014).
However, they disagree about the degree to which pay should 7
Rock Center for Corporate Governance, “CEOs and Directors on Pay:
scale with size—i.e., “how much more.” In general, how should 2016 Survey on CEO Compensation,” (2016).
8
See “The Giving Pledge,” available at: https://givingpledge.org/.
the level of CEO pay rise with complexity and profitability, 9
For the American public view of taxes, see Rock Center for Corporate
particularly among America’s largest corporations? Is there Governance at Stanford University, “2019 U.S. Tax Survey,” (2019).
a point at which CEO pay should simply stop increasing? Or
does the basic economic principle of value sharing continue to
apply no matter the scale of the company? David Larcker is Director of the Corporate Governance Research
3. Considerable political pressure exists to “reform” CEO pay. Initiative at the Stanford Graduate School of Business and senior faculty
How should political implications, if at all, be factored into member at the Rock Center for Corporate Governance at Stanford
University. Brian Tayan is a researcher with Stanford’s Corporate
CEO pay decisions? Should pay be reformed in the boardroom,
Governance Research Initiative. They are coauthors of the books
or should high pay levels be addressed solely through the tax Corporate Governance Matters and A Real Look at Real World
code?9 Corporate Governance. The authors would like to thank Michelle E.
4. Cynicism runs through the survey data cited in this Closer Gutman for research assistance with these materials.
Look. The public not only expresses unfavorable views about
CEO pay, but they also express healthy degrees of cynicism The Stanford Closer Look Series is dedicated to the memory of our
about how CEOs get their jobs (hard work versus luck and colleague Nicholas Donatiello.
connections) and about CEOs who donate their wealth (to help
society or for tax and reputational benefits). Are the negative The Stanford Closer Look Series is a collection of short case studies that
views of CEO pay driven in part by a broader skepticism or explore topics, issues, and controversies in corporate governance and
lack of esteem for CEOs? Or do high pay levels themselves leadership. It is published by the Corporate Governance Research Initiative
at the Stanford Graduate School of Business and the Rock Center for
contribute to lower regard for CEOs? 
Corporate Governance at Stanford University. For more information, visit:
In October 2019, the Rock Center conducted a survey of 3,078
1 http:/www.gsb.stanford.edu/cgri-research.
individuals—nationally representative by gender, age, race, political
affiliation, household income, and state residence—to understand the Copyright © 2019 by the Board of Trustees of the Leland Stanford Junior
views that Americans have on CEO compensation. Unless otherwise University. All rights reserved.

Exhibit 1 — American Perception of CEO Pay Levels
In general, do you believe that the CEOs of large, public U.S. companies are overpaid?
Yes 86%
No 14%
0% 20% 40% 60% 80% 100%
81% 87%
Yes 86% Yes 88%
92% 83%
19% 13%
No 14% No 12%
8% 17%
0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100%
Republican Independent Democrat High Income Middle Income Low Income
Source: Survey of 3,078 individuals, nationally representative by gender, age, race, political affiliation, household income, and state
residence, conducted in October 2019 by the Rock Center for Corporate Governance at Stanford University.

Exhibit 2 — CEO Pay Levels
CEO Pay at 500 Largest Companies
15.8
15.4 15.3
14.3 14.6
12.1
11.2
10.2 10.6
9.7
8.1 8.7
6.9 7.2 7.5
2014 2015 2016 2017 2018
25th Percentile Median 75th Percentile
CEO Pay at 3000 Largest Companies
Percentile Company Size Market Value CEO Pay Pay as % of Size

90th 300th largest $23,618 million $13.3 million 0.06%
75th 700th $8,256 million $7.8 million 0.09%
50th (Median) 1500th $2,981 million $4.1 million 0.14%
25th 2250th $1,405 million $2.0 million 0.14%
10th 2700th $945 million $1.0 million 0.11%
Sources: Equilar, “CEO Pay Trends,” (July 2019); The Conference Board, The Conference Board, “CEO & Executive Compensation Practices:
2018 Edition,” (2018); and the Center for Research in Security Prices (CRSP).

Exhibit 3 — CEO Pay and Company Revenue
How much should the CEO of a large company ($25 billion in sales) be paid relative to the CEO of a
smaller company ($25 million in sales?)
More 49%
The same 34%
Less 17%
0% 20% 40% 60%
[If more] How much more?
10% more 16%
25% more 31%
50% more 16%
75% more 6%
2 times as much 11%
3-9 times as much (collapsed) 12%
10 times as much 5%
More than 10 times as much 3%
0% 20% 40%
15% 12%
10% more 16% 10% more 17%
19% 21%
31% 29%
25% more 29% 25% more 30%
32% 33%
15% 14%
50% more 17% 50% more 17%
16% 18%
3% 6%
75% more 7% 75% more 5%
6% 5%
15% 13%
2 times as much 11% 2 times as much 13%
10% 8%
12% 14%
3-9 times as much (collapsed) 11% 3-9 times as much (collapsed) 12%
11% 9%
5% 8%
3% 4%
4% 4%
More than 10 times as much 3% More than 10 times as much 3%
3% 2%
0% 20% 40% 0% 20% 40%
Exhibit 4 — CEO Pay and Store Count (Complexity)
How much should the CEO of a company with 10,000 stores be paid relative to the CEO of a company
with 10 stores in the U.S.?
More 62%
The same 26%
Less 12%
0% 20% 40% 60% 80%
10% more 12%
25% more 27%
50% more 19%
75% more 5%
2 times as much 10%
10 times as much 8%
0% 20% 40%
11% 10%
10% more 11% 10% more 14%
15% 14%
26% 23%
25% more 26% 25% more 27%
27% 29%
20% 17%
50% more 19% 50% more 18%
18% 20%
5% 4%
75% more 3% 75% more 5%
7% 7%
9% 12%
9% 9%
14% 15%
15% 12%
9% 11%
7% 7%
6% 8%
2% 2%
0% 20% 40% 0% 20% 40%

Exhibit 5 — CEO Pay and Company Growth
How much should the CEO of a company that is growing and hiring employees in the U.S. be paid
relative to the CEO of a company that is shrinking and laying off employees in the U.S. (assuming they
are in the same industry and similarly sized today)?
More 54%
The same 31%
Less 15%
0% 20% 40% 60%
10% more 20%
25% more 28%
50% more 22%
75% more 7%
2 times as much 9%
10 times as much 2%
0% 20% 40%
20% 17%
10% more 19% 10% more 22%
21% 21%
25% 26%
25% more 27% 25% more 30%
32% 27%
22% 21%
50% more 22% 50% more 20%
21% 24%
8% 7%
75% more 5% 75% more 5%
7% 10%
9% 11%
7% 6%
11% 12%
8% 8%
2% 2%
1% 2%
3% 4%
3% 2%
0% 20% 40% 0% 20% 40%

Exhibit 6 — Compensating Founders versus Professional CEOs
Does the CEO who starts a company and grows it to be very large (the founder) deserve to be paid
more than the CEO of a large company who did not start the company but was promoted to the job
(not the founder), assuming they are in the same industry and similarly sized today?
Yes 64%
No 36%
0% 20% 40% 60% 80%
10% more 17%
25% more 26%
50% more 21%
75% more 8%
2 times as much 11%
10 times as much 2%
0% 20% 40%
15% 14%
10% more 18% 10% more 17%
19% 20%
24% 24%
25% more 29% 25% more 27%
25% 26%
21% 18%
50% more 20% 50% more 22%
22% 22%
10% 7%
75% more 5% 75% more 7%
9% 11%
12% 15%
10% 9%
10% 12%
10% 8%
3% 4%
1% 1%
5% 6%
4% 3%
0% 20% 40% 0% 20% 40%
Exhibit 7 — CEO Pay and Value Sharing
If a CEO creates $100 million in value through his or her management, how much of this $100 million
should be paid to the CEO as compensation?
Median $10
$- $2 $4 $6 $8 $10 $12 $14 $16

$ in millions
$10 $9
Median $10 Median $10
$10 $15
$- $2 $4 $6 $8 $10 $12 $14 $16 $- $2 $4 $6 $8 $10 $12 $14 $16

$ in millions $ in millions
Hypothetically, if a company is worth $100 million more than at the beginning of the year, how much
of this $100 million should be given to the CEO as compensation?
Median $0.5
$0 $2 $4 $6 $8 $10 $12 $14 $16

$ in millions
$0.5 $1.0
Median $0.5 Median $0.3
$0.5 $0.3
$0 $2 $4 $6 $8 $10 $12 $14 $16 $0 $2 $4 $6 $8 $10 $12 $14 $16

$ in millions $ in millions
Sources: Survey of 3,078 individuals, nationally representative by gender, age, race, political affiliation, household income, and state
residence, conducted in October 2019 by the Rock Center for Corporate Governance at Stanford University; 2019 survey, and Rock Center
for Corporate Governance at Stanford University, “Americans and CEO Pay: 2016 Public Perception Survey on CEO Compensation,” (2016).

Exhibit 8 — CEO Pay Relative To Other Executives
Do you think the CEO should always be the highest paid person at the company?
Yes 62%
No 38%
0% 20% 40% 60% 80%
71% 66%
Yes 56% Yes 63%
61% 59%
29% 34%
No 44% No 37%
39% 41%
0% 20% 40% 60% 80% 0% 20% 40% 60% 80%

Exhibit 9 — CEO Pay Relative To Other Highly Paid Professionals
If the CEO of a movie studio pays an important actor $10 million per year, should the CEO of this movie
production company make more than $10 million per year?
Yes 43%
No 57%
0% 20% 40% 60%
41% 37%
Yes 37% Yes 42%
41% 53%
59% 63%
No 63% No 58%
59% 47%
0% 20% 40% 60% 80% 0% 20% 40% 60% 80%
If the CEO of a sports team pays an important athlete $10 million per year, should the CEO of this
sports team make more than $10 million per year?
Yes 40%
No 60%
0% 20% 40% 60% 80%
46% 37%
Yes 35% Yes 40%
39% 45%
54% 63%
No 65% No 60%
61% 55%
0% 20% 40% 60% 80% 0% 20% 40% 60% 80%
Exhibit 10 — The Contribution of Hard Work to CEO Promotion
To what extent do you agree with the following statement: CEOs get promoted to their jobs because
they worked harder than others.
Strongly agree 12%
Agree 27%
Neither agree nor disagree 34%
Disagree 20%
Strongly disagree 7%
0% 20% 40%
17% 12%
Strongly agree 8% Strongly agree 10%
11% 13%
32% 24%
Agree 23% Agree 29%
26% 26%
31% 33%
Neither agree nor disagree 40% Neither agree nor disagree 33%
33% 37%
16% 23%
Disagree 20% Disagree 21%
22% 17%
4% 8%
Strongly disagree 9% Strongly disagree 7%
8% 7%
0% 20% 40% 60% 0% 20% 40%

Exhibit 11 — The Contribution of Luck to CEO Promotion
they were lucky.
Strongly agree 9%
Agree 23%
Disagree 24%
0% 20% 40%
10% 8%
10% 10%
21% 21%
Agree 22% Agree 24%
26% 24%
34% 33%
38% 38%
28% 29%
21% 21%
7% 9%
5% 7%
0% 20% 40% 0% 20% 40%

Exhibit 12 — Inside Connections and CEO Promotion
they had connections who helped them get to the top
Strongly agree 23%
Agree 38%
Disagree 6%
0% 20% 40%
20% 23%
26% 23%
38% 39%
Agree 38% Agree 39%
39% 37%
33% 29%
27% 32%
7% 7%
6% 6%
2% 2%
2% 2%
0% 20% 40% 60% 0% 20% 40% 60%

Exhibit 13 — CEO Perquisites
Is it reasonable for a company to offer the following perks to its CEO?
Private car for work 34% 55% 11%
Supplemental pension after retirement 25% 50% 25%
Personal financial advisor 24% 46% 30%
Personal security 19% 62% 19%
Guaranteed severance if they are fired 16% 44% 40%
Private jet for work 15% 55% 30%
Membership to local country club 15% 43% 42%
0% 20% 40% 60% 80% 100%
Always Sometimes Never

Exhibit 14 — Company Profit and CEO Pay
The average large company in the U.S. earned a profit of $2 billion last year and its CEO was paid $12
million. Which of the following best describes your opinion about CEO pay at these companies?
CEOs are highly overpaid 36%
CEOs are somewhat overpaid 34%
CEOs are fairly paid 26%
CEOs are somewhat underpaid 3%
CEOs are highly underpaid 1%
0% 20% 40%
31% 36%
CEOs are highly overpaid 34% CEOs are highly overpaid 35%
41% 37%
34% 34%
CEOs are somewhat overpaid 34% CEOs are somewhat overpaid 36%
34% 32%
30% 26%
CEOs are fairly paid 27% CEOs are fairly paid 25%
22% 27%
4% 3%
CEOs are somewhat underpaid 3% CEOs are somewhat underpaid 3%
2% 3%
1% 1%
CEOs are highly underpaid 2% CEOs are highly underpaid 1%
1% 1%
0% 20% 40% 60% 0% 20% 40%

Exhibit 15 — company market value and ceo pay
The average large company in the U.S. had a market valuation of $45 billion last year and its CEO had
accumulated $50 million in company stock during their time as CEO. Which of the following best
describes your opinion about CEO pay at these companies?
CEOs are highly overpaid 37%
CEOs are somewhat overpaid 35%
CEOs are fairly paid 25%
CEOs are somewhat underpaid 2%
CEOs are highly underpaid 1%
0% 20% 40%
31% 40%
CEOs are highly overpaid 38% CEOs are highly overpaid 37%
43% 36%
37% 34%
CEOs are somewhat overpaid 34% CEOs are somewhat overpaid 37%
35% 32%
29% 24%
CEOs are fairly paid 24% CEOs are fairly paid 24%
20% 26%
2% 2%
CEOs are somewhat underpaid 2% CEOs are somewhat underpaid 1%
1% 4%
1% 0%
CEOs are highly underpaid 2% CEOs are highly underpaid 1%
1% 2%
0% 20% 40% 60% 0% 20% 40% 60%

Exhibit 16 — charitable giving
Some CEOs have pledged to donate the vast majority of their wealth to charitable organizations
rather than leave it to their children through inheritance. What is your opinion of this behavior?
(select all that apply)
They are a good role model for others 34%
They want to reduce their taxes 31%
They have probably given a lot to their children already 30%
They feel strongly about addressing important social or

27%
environmental problems
They want to improve their reputation 25%
They deserve favorable public recognition 22%
They want to deflect criticism about their pay 21%
They want the press to write positive stories about them 17%
They feel guilty about making so much money 13%
No opinion 12%
0% 20% 40%

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Stanford Closer LOOK series

pay for performance... but not

Stanford Closer LOOK series 1

Stanford Closer LOOK series 2

Stanford Closer LOOK series 3

Exhibit 1 — American Perception of CEO Pay Levels

0% 20% 40% 60% 80% 100%

Yes 86% Yes 88%

Republican Independent Democrat High Income Middle Income Low Income

Stanford Closer LOOK series 4

Exhibit 2 — CEO Pay Levels

CEO Pay at 500 Largest Companies

2014 2015 2016 2017 2018

25th Percentile Median 75th Percentile

CEO Pay at 3000 Largest Companies

Percentile Company Size Market Value CEO Pay Pay as % of Size

Stanford Closer LOOK series 5

Exhibit 3 — CEO Pay and Company Revenue

The same 34%

0% 20% 40% 60%

[If more] How much more?

10% more 16%

25% more 31%

50% more 16%

2 times as much 11%

3-9 times as much (collapsed) 12%

More than 10 times as much 3%

0% 20% 40% 0% 20% 40%

Republican Independent Democrat High Income Middle Income Low Income

Exhibit 4 — CEO Pay and Store Count (Complexity)

The same 26%

0% 20% 40% 60% 80%

[If more] How much more?

10% more 12%

25% more 27%

50% more 19%

2 times as much 10%

3-9 times as much (collapsed) 15%

More than 10 times as much 4%

0% 20% 40% 0% 20% 40%

Republican Independent Democrat High Income Middle Income Low Income

Stanford Closer LOOK series 7

Exhibit 5 — CEO Pay and Company Growth

The same 31%

0% 20% 40% 60%

[If more] How much more?

10% more 20%

25% more 28%

50% more 22%

3-9 times as much (collapsed) 9%

More than 10 times as much 3%

Republican Independent Democrat High Income Middle Income Low Income

Stanford Closer LOOK series 8

Exhibit 6 — Compensating Founders versus Professional CEOs

0% 20% 40% 60% 80%

[If more] How much more?

10% more 17%

25% more 26%

50% more 21%

2 times as much 11%

3-9 times as much (collapsed) 11%

More than 10 times as much 4%

0% 20% 40% 0% 20% 40%