SOCIAL CAPITAL AT THE TOP - EFFECTS OF SOCIAL SIMILARITY AND STATUS ON CEO COMPENSATION

This study explored the effects of social capital, measured both absol utely and relatively, on CEO-compensation in a sample of 61 CEOcompens ation committee chairperson dyads. We controlled for variables represe nting economic, social comparison, and other social influence explanat ions for CEO compensation. Social similarity did not influence pay, bu t a chair's absolute social capital and a CEO's social capital relativ e to his or her chair's significantly increased CEO compensation. The potential of social capital explanations to increase understanding of the executive wage-setting process beyond that derived from simple eco nomic theories is discussed.