Senior CEOs in the US were prepared to take a 12% pay cut—equivalent to USD 1.3 million a year—in order to work for top brands, according to research conducted by the London Business School. The team behind the survey, which looked at more than 10,000 compensation-brand observations, argued that the results showed a strong correlation between the perceived strength of the brand and the executive’s willingness to accept lower pay.
It comes as increasing amounts of research is showing the link between brand and talent attraction—with LinkedIn’s Asia Talent Trends Report earlier this year establishing a clear link between the two. But seemingly, this is the first time that senior executive have gone all-out to even accept lower pay just to be associated with a brand. The research contributes to an already highly charged debate over the ever-increasing salaries of company’s top executives by highlighting that investment in brand and marketing can allow for greater internal regulation over executives’ pay.
The lead academic behind the results, Nader Tavassoli, Professor of Marketing, London Business School explained, “A well regarded brand can do more than just helping to recruit the best leadership talent—with pay accounting for the largest cost in many organisations, it can also benefit the bottom-line by lowering payroll. HR teams should therefore leverage brand equity as much as they would more-traditional benefits.”
While this adds an interesting dynamic to debate over executive pay, the research however did uncover that younger executives were more likely to take a salary-hit than their older counterparts. Such trends were put down to younger talent wanting the brand association to build up their identity and portfolio—which was deemed particularly important if they wanted a credible indicator of their talent.
Paul Arkwright
Publisher
