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Do High Incomes Make CEOs Mean?

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Is excessive compensation to blame for bad behavior?

Robert Frank, over at blog "The Wealth Report" brings a new research paper called “When Executives Rake in Millions: Meanness in Organizations” to our attention this morning.

The paper, by Sreedhari Desai at Harvard, Jennifer George of Rice University and Arthur Brief of the University of Utah, finds that “Increasing executive compensation results in executives behaving meanly toward those lower down the hierarchy” and “higher income inequality between executives and ordinary workers results in executives perceiving themselves as being all-powerful and this perception of power leads them to maltreat rank and file workers.”

Frank then poses an interesting question:

"The study implies that money is a cause of the meanness... If there is in fact a correlation, perhaps the type of CEO that wants to be paid far more than his business’s rank-and-file workers also is the type of CEO that may not respect his business’s workers as much. In other words, that character, not money, may be the source of nastiness."

Extending the thought, I'm wondering if some people who rise to the level of CEO in a large organization and collect outsize compensation packages undergo a sort of fundamental shift in their worldview once they get there?

Or perhaps the path to the C-suite is best-navigated by people who are not generally predisposed to the "warm and fuzzy" personality traits seen in, say, those running non-profits?

This, of course, is not to say that all CEOs are nasty people. Or that everyone working at UNICEF is an angel.

Just askin...
POSITION:  No positions in stocks mentioned.