Corporate Advisory Firm Invests in Salary Database

The Corporate Executive Board, a District firm that provides business advice to corporations around the world, and the Allen & Co. investment bank in New York yesterday announced a $8.8 million investment in PayScale, a major provider of online salary data.

The move allows the CEB to provide salary information to its clients to help them set pay levels.

"One of the decisions [clients] make on a very regular basis is how much should I pay somebody," said Thomas L. Monahan III, CEB's chief executive. "The key asset they need to have to make that decision is: What do other people like this make? PayScale's platform with 8 million unique salary profiles allows us to partner with them to bring the [human resources] executives the information they need to make those choices."

Founded in 2002 and headquartered in Seattle, PayScale describes itself as the world's largest database of employee compensation, providing immediate information on current salaries. PayScale allows workers to anonymously compare their salaries online with similar people and job characteristics, accounting for education, experience, location and company size.

PayScale chief executive Mike Metzger said the investment joins CEB's Fortune 5000 clients with PayScale's audience, which is smaller companies with 1,000 or fewer employees. It also creates opportunities for gathering and selling information beyond salaries, he said.

"Both organizations see that some of the technology and platform capabilities that PayScale has built can be applied to a broader set of information-gathering and analysis and dissemination beyond compensation," Metzger said. "We see this as a multidimensional, strategic relationship. At the end of the day, the way that will show up is in accelerated revenue for both organizations."

The CEB was spun off in 1997 from the Advisory Board, which was founded by Atlantic Media chairman David Bradley. It provides best-practices research and analysis focusing on corporate strategy, operations and management to more than 3,700 corporations around the world.

Allen & Co. is a boutique investment bank headed by Herbert Allen. Allen, a large shareholder in Coca-Cola, is known for his annual Sun Valley, Idaho, summer retreat for business moguls. Attendees have included investor Warren Buffett of Berkshire Hathaway, Microsoft founder and chairman Bill Gates, and News Corp. Chairman Rupert Murdoch.

"There is a large opportunity for a real-time, scalable compensation data company, and we think this is a better mousetrap than what is currently available to businesses," said John Griffen, managing director at Allen & Co.

CEB shares closed at $68.27, up 2.9 percent.