Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

CEOs With Snob Appeal Get High Pay, Study Says

Social scientists have spent decades trying to discover why some corporate chief executives make more money than others. Three university researchers say they now have a surprising answer: snob appeal.

Their complex analysis of the records of 61 Fortune 500 companies, controlling the data for company size, CEO tenure and education and other factors, shows that if the CEO has higher social status than the chairman of the board's compensation committee, he is likely to make 20 percent more than a CEO with less status than his compensation committee chairman.

The research by scholars at Duke University, Stanford University and the University of Illinois is the latest of a number of studies attempting to solve the mysteries of corporate life through the examination "social capital" -- the power of social status unrelated to grit and energy and size of paycheck.

Executive compensation experts caution that the new CEO study includes relatively few companies and assumes, among other things, that high status is conferred by attending one of only 11 colleges, but they concede that snobbery is still a lively presence in American boardrooms and may have an impact.

"Social capital is incredibly important in the corporate world," said Maura Belliveau, a professor at Duke's Fuqua School of Business who is a co-author of the study in the December/January issue of the Academy of Management Journal.

The researchers analyzed 1985 data on CEO base salaries. They assessed the status of CEOs and their compensation committee chairmen based on how many boards and clubs they belonged to and where they went to college. Belliveau said that although the salary data is 12 years old and does not include stock options, she thinks the differences in compensation and their ties to social status still hold up.