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Bruce Ellig first discussed "the ratchet effect" in compensation many decades ago, but it is always important to remind folks of these constant dynamics. The phenomenon of one-way escalating demand engineered through careful one-upsmanship has been well documented in Congress by the Waxman Committee on Executive Compensation Conflicts of Interest Among Compensation Consultants and in academic research such as that by Wei Cen and Naqiong Tong on "Compensation Consulting Independence and Ceo Pay" published just this year.

After all, how many times have you been asked to survey smaller lower-paying enterprises for salary comparisons?

Excellent observations. Considering compensation is "all about the numbers" it is funny that the math of percentiles seems to escape most people's attention.

It is not so much that Amgen or a similar company wants to be in the 75th percentile of their peers. It is more than peer groups are so narrow. If peer groups were expanded to truly include a full dynamic listing of both small and large companies that are reasonable comparisons we may find that a company like Amgen is paying its CEO marginally too much, but much smaller companies are paying their CEOs FAR to much in comparison.

I would love to see an academic study that created proposed peer groups, based on different criteria that represented more fully that spectrum of CEOs and other c-suite positions.

Of course, no one wants to me in the 5th percentile, but my guess is that even the lowest paid CEO in the Washing Post data is far above median when compared to a more complete peer group.

Hi Jim and Dan. Thanks so much for weighing in. Let's face it, the sampling selections are just one way, and the easiest way, for the exec to get the money they've been wishing for. What about a comparative sample of three other companies? And so on.

But now that there is a public conversation about how this is coming about, you'd imagine that more of the key investors will be asking pointed questions. At least it will be a trend to watch.

Especially if there are more eye to eye discussions, as Blair Jones was suggesting. It's hard to have a relationship when all you talk about is what I want (and get)!

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