at least the level of the competition. The selection of "peer companies" can be pre-tested to make certain none will skew the averages unfavorably. Meanwhile, you my rest assured that your peer companies are conducting their own surveys It is a golden circle. Each year all the laggards will raise their salaries to catch up. It follows as night the day, with mathematical certainty, that the averages will rise and next year's survey will show that you have failed to keep pace. Corrective action is thus ALWAYS needed to raise executive compensation. A side point. One of the nice things about compensation studies is that, with rare exceptions, they relate compensation to the size of the company or its gross sales. They never obscure the findings by introducing other complicating performance factors like profit or return-on-investment. Obviously, this opens up the possibility of raising yourself by your own bootstraps. If you don't like your place on the size scale, simply acquire another company or two. The deals don't have to be good - just large. Now, even in the best regulated board rooms, one is troubled once in a while with a director who is so inconsiderate as to challenge the process and its findings. He may even talk about his responsibilities to look after the shareholders' interests. He may be ill-mannered enough to wonder openly if "anyone is worth that much money." This is an annoying but easily solvable problem. It is readily dealt with by the simple step of retaining a management consulting firm. And this, too, is a risk-free maneuver. 4