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QUESTION: What exactly is Compensation Standard Error?  Why is it expressed as a percentage, and what does the value mean?

 

The Compensation Standard Error reflects the estimated variability of compensation within the executive population. Put more technically, it is the sample estimate of the population standard deviation (the average relative distance between each data point in the sample and the sample mean), divided by the square root of the number of observations in the sample.

 

Standard error is expressed as a percentage when used with regression analyses.

 

As an example, a Standard Error of 25% means that 67% of the data points fall within +/- 25% of the mean salary value for the organization size specified.  Two Standard Errors would include 95% of the observations.

 

For the top six jobs, the companies represented by dots on the graph are used to determine the standard error. See Using XA FAQ #6.  The line drawn through the dots on the graph represent the mean (when mean is selected by the user).