Sales outlets and CEO pay
Student’s research reveals supply chain, CEO pay insights
Anna Bliss regularly rubs shoulders with CEOs and business owners. She fishes with them and calls them regularly to keep in touch.
Her father is the chief executive officer of a family-owned fishing lure company called Jaw Bug Tackle headquartered at the family’s Bonners Ferry home. The online company sells hand-made trout, salmon and bass flies.
The family’s fishing tackle business is one of two — the other is her grandparent’s tree farm, Clifty View Nursery — that Bliss helps with, and both the farm and lure company provided Bliss with unique insights in starting and running businesses, marketing products and getting them from producer to consumer.
Strong ties to the world of marketing, profit sharing and supply chains led Bliss to enroll at University of Idaho — where her grandfather and uncle attended – as a business major. This year she earned two student grants for research projects that can be applied to family businesses throughout North Idaho, but that’s not why she pursued the exploration.
“I was looking for research opportunities in the College of Business and Economics and with the help of a professor received two fellowships to explore topics that are trending right now,” Bliss said.
Bliss spent most of Summer ’24 on campus, investigating, crunching data and tracking outcomes to learn how companies can improve sales and stay competitive in ever-changing business environments. Bliss became the first CBE student to win an Office of Undergraduate Research (OUR) grant , which funded the project. She is also the first CBE student to receive a SURF – summer undergraduate research fellowship — grant. She used the money to explore if CEO salaries are commensurate with their company’s financial outcomes.
Both awards, valued at over $6,000 were equivalent to having a fulltime summer job, Bliss said. The results of the research will be presented at business seminars during the 2024-25 school year.
Despite growing up in a free enterprise-oriented family, Bliss, who excelled in sports in high school, didn’t immediately decide on a business major. She initially started as a computer science major but found herself more drawn to the strategic and analytical side of business, with goals of one day being a business owner herself.
I like to think of myself as a jack-of-all-trades.Anna Bliss, accounting major
“I realized that pursuing a business degree aligned better with my interests,” she said. “I kept a minor in cybersecurity because I find the field fascinating and constantly advancing.”
Bliss said she opted to investigate CEO pay because it is a popular topic. Whether high CEO salaries are justifiable has been disputed for more than a decade.
“CEO pay isn’t just tied to performance factors; there are many complexities involved, such as negotiation power, market trends and company-specific circumstances,” she said.
She analyzed S&P 500 companies by examining their financial data, including balance sheets and income statements. Bliss calculated performance ratios, such as return on equity and return on assets, using established business models that incorporate multiple financial variables. She then used regression analysis to test the relationships between these variables, ensuring that the models accurately reflected the impact of changes without introducing bias or inaccuracies. This approach helped refine the models for better accuracy and consistency in evaluating company performance.
Whether high CEO salaries are justified, she learned, depends on who you talk to.
“A lot of it has to do with the board of directors, governing structure and finding quality candidates who have the background, skills and education needed to be a CEO,” Bliss said. “CEO pay isn’t just tied to performance factors; there are many complexities involved, such as negotiation power, market trends, and company-specific circumstances.”
She also studied how innovation in an ever-changing business environment helps businesses stay profitable while failure to adapt can result in loss of revenue and in the worst case, irrelevance.
As an example, Sears Holding Corp., the largest retailer in the U.S. in 1980, fell to 31st in 2018, and today only 12 stores remain in the country, compared to its peak of 3,500 stores nationwide.
“Sears was already facing significant challenges from its bankruptcy prior to the pandemic, and COVID-19 further strained its operations while companies like Costco stayed effective because they had a large reservoir of paid memberships and Amazon maintained its market space because of e-commerce,” she said. “The brick-and-mortar model, which Sears Holding depended upon, is less competitive and efficient. They weren’t willing to integrate new strategies or innovations to stay relevant in the market.”
In addition to the mass merchandise industry, Bliss delved into the effect of supply chain innovation in the airline industry and consumer electronics.
Shenghan Xu, associate professor of operations and supply chain management, alerted Bliss to both grant opportunities and helped her hone in on research topics.
“People often think that research is only for science or engineering, but every major business decision is based on thorough research and analytics,” Xu said. “We were interested in investigating whether operational differences impact various financial measures. So, Anna started to gather data sources, understand different financial measures and operational indicators, and conduct data analysis.”
Qualities that make for good researchers in STEM fields also apply to business and economics, Xu said.
“Anna has an intellectual curiosity and is eager to work,” Xu said. “As a faculty member, I had a great experience working with her and seeing her grow professionally.”
Bliss will travel with all the U of I undergraduate researchers to the Idaho Undergraduate Research Conference in Boise to present her work, and to network with researchers from other universities.
What did she learn from her investigations?
“I had a lot of fun exploring supply chain innovation,” Bliss said. “It’s fascinating to illustrate why supply chain innovation is crucial and to see how companies like Costco and Amazon successfully implement it. Through both of my projects, I've learned that the way we think about these issues isn't as simple as it’s often made out to be. Whether it’s the debate on CEO pay or the necessity of innovation, nothing is black and white.”
Article by Ralph Bartholdt, University Communications
Photo by Garrett Britton, University Visual Productions
Published in September 2024