The rocky road from insight to understanding

Google Scholar tells us that there are 254,000 papers and books on  the topic of CEO compensation and firm performance. Picking up the Aguinis, Martin, Gomez-Mejia, O’Boyle and Joo (2017) manuscript, we had to ask, “Do we really need to read this paper?” As always, the answer to that question hinges on whether or not we learn anything new from the work. Pointing out that the distribution of CEO compensation is skewed, Aguinis et al. (2017) ask us to account statistically for the fact that a power-law distribution may better capture the phenomenon than a normal distribution. In the end, they suggest that our understanding of CEO compensation may be mistaken.