• Rewards for executives are disproportionately large compared to rewards for everyone else. In many organizations, executive rewards are disproportionately large to rewards received by everyone else in the organization. A study conducted by Pearl Meyer & Partners in 2004 revealed that the average compensation received by CEOs in major U.S. corporations was US $9.84 million, compared to an average compensation for employees in nonsupervisory roles of $27,485. The compensation for these CEOs was more than 360 times that of their employees! Such a large difference, particularly when the performance of the organization is not stellar, can lead to serious morale problems. CEOs should be compensated according to their performance, and an important indicator of CEO performance is overall firm performance (e.g., stock price in the case of publicly traded organizations).