Question 6.130

6.130 CEO pay.

A study of the pay of corporate chief executive officers (CEOs) examined the increase in cash compensation of the CEOs of 104 companies, adjusted for infation, in a recent year. The mean increase in real compensation was , and the standard deviation of the increases was . Is this good evidence that the mean real compensation of all CEOs increased that year? The hypotheses are

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Because the sample size is large, the sample is close t the population , so take .

  1. Sketch the Normal curve for the sampling distribution of when is true. Shade the area that represents the -value for the observed outcome .
  2. Calculate the -value.
  3. Is the result signifcant at the level? Do you think the study gives strong evidence that the mean compensation of all CEOs went up?