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How Media Coverage Boosts CEO Pay

A lot of top executives are media-averse -- they don't feel comfortable doing interviews, they can't control the outcome, they are afraid of looking like jerks, and they think every reporter is going to give them the Mike Wallace/60 Minutes treatment.

It's a constant problem for me when I'm wearing one of my other hats as a media interview trainer. Just getting these guys to do the training is at least half the challenge. Getting them to concentrate and stay for the whole training is often the next biggest challenge. They just don't see what's in it for them.

So maybe this study from the University of Colorado's B-school will help. In a paper called "The CEO as Media Hero: Effects of CEO Celebrity," the researchers looked at the effects of press coverage -- positive, negative or neutral -- on CEO pay. They found that more coverage of any kind boosted the CEO's take.

Resarchers Markus Fitza, Mathew Hayward and Kai Larsen looked press coverage of 1,500 companies and their CEOs from 1997 to 2005 and added up how often they appeared in Business Week, the New York Times, Wall Street Journal and other major national business publications.

Their research found that each article in a major business news publication increased a CEO's bonus by more than $650,000. A cover story was worth a whopping $1.1 million in extra compensation.

Why? The researchers zeroed in on whether press coverage influenced the perception of CEO performance in the eyes of the outside Board directors who vote on executive bonuses. The answer was yes: "The availability of press data about CEOs and their activities renders them more legitimate, efficacious and worthy in the minds of CEO evaluators."

So the next time your CEO or CEO-wannabe balks at doing a media interview, refer them to this piece of data. It might change their mind.

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