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Abstract

Chief executive (CEO) compensation is a potent instrument through which theorists can improve their understanding of organization substance and symbol. This paper reviews and integrates the literature on CEO compensation, focusing on both determinants and consequences of this complex, often controversial phenomenon. The central thesis is that CEO pay is at once both more and less ‘sensible’ than its critics and architects, respectively, contend. Comprehending CEO compensation, whether for purposes of description or prescription, requires the use of multiple perspectives—economic, political, social, and individual.