{"id":75621,"date":"2020-02-21T08:00:05","date_gmt":"2020-02-21T13:00:05","guid":{"rendered":"https:\/\/chiefexecutive.net\/?p=75621"},"modified":"2025-03-28T14:09:47","modified_gmt":"2025-03-28T18:09:47","slug":"in-some-cases-pay-really-should-be-unequal","status":"publish","type":"post","link":"https:\/\/chiefexecutive.net\/in-some-cases-pay-really-should-be-unequal\/","title":{"rendered":"In Some Cases, Pay Really Should Be Unequal"},"content":{"rendered":"<p class=\"p1\">Fair or not, in business, certain functions are more important than others, and their compensation should reflect that. Yet, <i>Chief Executive<\/i>\u2019s CEO &amp; Senior Executive\u00a0 Compensation Report for Private Companies, which reports on compensation practices at more than 1,600 private companies, shows that too many firms do just the opposite, averaging out executive compensation across their entire team in search of \u201cfairness.\u201d<\/p>\n<p class=\"p2\">According to our research, companies across all revenue sizes\u2014and more so at the higher end\u2014report setting specific salary ranges for specific positions. The problem with this compensation strategy? You lose your ability to reward, retain and motivate superstars for key positions. And you need superstars to win.<\/p>\n<p class=\"p2\"><img fetchpriority=\"high\" decoding=\"async\" class=\" wp-image-75623 alignright\" src=\"https:\/\/chiefexecutive.net\/wp-content\/uploads\/2020\/02\/chart-for-comp.png\" alt=\"\" width=\"478\" height=\"270\" data-wp-editing=\"1\" srcset=\"https:\/\/chiefexecutive.net\/wp-content\/uploads\/2020\/02\/chart-for-comp.png 806w, https:\/\/chiefexecutive.net\/wp-content\/uploads\/2020\/02\/chart-for-comp-600x340.png 600w\" sizes=\"(max-width: 478px) 100vw, 478px\" \/>But\u2014contrary to what you may think\u2014you don\u2019t need all your top people to be superstars. The trick is to determine where you need them, pay what you need to pay to get them\u2014and cut back where you don\u2019t. A top-decile executive (paid a superstar top-decile executive salary) is not going to be warranted\u00a0in every C-Suite position. For instance, at an early-stage biotech company, the head of research and development may be the most critical person, so you\u2019ll need a superstar vs. just a good or very good performer. The vice president of sales and marketing? Maybe not as important in this type of organization at this stage of the game (though that could change when you\u2019re ready to go to market).<\/p>\n<p class=\"p1\">There\u2019s no set rule as to what that blend is or which position warrants top-quartile or decile compensation\u2014every company will need to figure out the right formula\u2014but a good starting point in getting the formula right entails weighing the following:<\/p>\n<p class=\"p1\">\u2022 Your company\u2019s growth stage<\/p>\n<p class=\"p1\">\u2022 Your industry and business model<\/p>\n<p class=\"p1\">\u2022 Compensation benchmarks for your industry and specific roles<\/p>\n<p class=\"p1\">\u2022 Your ownership model<\/p>\n<p class=\"p1\">\u2022 Your overall balance sheet<\/p>\n<p class=\"p2\">Once you do that, you can figure out who on your team should be given a superstar salary and who just needs to be a good performer. That, in turn, will enable you to better understand how you should divvy up the executive compensation pie by further benchmarking what your rivals are willing to pay. This can also lead to potential opportunities to recruit superstar executives to fill specific needs.<\/p>\n<p class=\"p1\"><i><a href=\"https:\/\/CompReport.ChiefExecutive.net\">Find more best practices on executive compensation strategies.<\/a><\/i><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Not everyone in your C-Suite is a superstar, so you need to divvy up the compensation pie accordingly, rather than average it in pursuit of &#8220;fairness.&#8221;. <\/p>\n","protected":false},"author":3435,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_oasis_is_in_workflow":0,"_oasis_original":0,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"","_relevanssi_noindex_reason":"","footnotes":"","_links_to":"","_links_to_target":""},"categories":[2199,905,2211],"tags":[42909],"class_list":["post-75621","post","type-post","status-publish","format-standard","hentry","category-compensation","category-finance","category-retention-talentmanagement","tag-research"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>In Some Cases, Pay Really Should Be Unequal<\/title>\n<meta name=\"description\" content=\"Not everyone in your C-Suite is a superstar, so you need to divvy up the compensation pie accordingly, rather than average it in pursuit of &quot;fairness.&quot;.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/chiefexecutive.net\/in-some-cases-pay-really-should-be-unequal\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"In Some Cases, Pay Really Should Be Unequal\" \/>\n<meta property=\"og:description\" content=\"Not everyone in your C-Suite is a superstar, so you need to divvy up the compensation pie accordingly, rather than average it in pursuit of &quot;fairness.&quot;.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/chiefexecutive.net\/in-some-cases-pay-really-should-be-unequal\/\" \/>\n<meta property=\"og:site_name\" content=\"ChiefExecutive.net\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/chiefexecutivegroup\" \/>\n<meta property=\"article:published_time\" content=\"2020-02-21T13:00:05+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-03-28T18:09:47+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/chiefexecutive.net\/wp-content\/uploads\/2020\/02\/chart-for-comp.png\" \/>\n\t<meta property=\"og:image:width\" content=\"806\" \/>\n\t<meta property=\"og:image:height\" content=\"457\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Melanie C. 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