The Art of Tetman Callis

“A few years ago, a group of economists looked at more than a hundred Fortune 500 firms, trying to figure out what predicted how much money the C.E.O. made.  Compensation, it turned out, was only weakly related to the size and profitability of the company.  What really mattered was how much money the members of the compensation committee of the board of directors made in their jobs.  Pay is not determined vertically, in other words, according to the characteristics of the organization an executive works for; it is determined horizontally, according to the characteristics of the executive’s peers.  They decide, among themselves, what the right amount is.  This is not a market.” — Malcolm Gladwell, “Talent Grab”