Top Management Team Pay Dispersion
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Author | : Marilou Rozé Bianchi |
Publisher | : |
Total Pages | : 72 |
Release | : 2017 |
Genre | : |
ISBN | : |
This paper explores TMT pay dispersion in lone founder firms. The scarcity of the literature on this topic provides an opportunity to study the influence of extra- and intra-organizational factors on TMT pay dispersion. Knowing that high pay dispersion hurts firm performance, it is important to understand its antecedents. Based on panel data analyses of all S&P500 firms from 2008-2013, my results demonstrate that lone founder firms exhibit less pay dispersion than other firms. It seems that when founders are present on their firms’ board of directors, the effective monitoring of firm managers makes it redundant to offer the latter high incentive pay that would fuel pay dispersion. Regarding extra-organizational factors, recession appears to increase TMT pay dispersion, particularly in lone founder firms – possibly because lone founder firms regularly use attractive pay packages to hire talent from competitors during economic downturns and thereby foster pay dispersion. Finally, high-tech industries are negatively related to pay dispersion. The complexity of managerial tasks in such industries makes it necessary to pay all (rather than some) managers relatively high compensation, limiting pay dispersion.
Author | : Sydney Finkelstein |
Publisher | : Strategic Management |
Total Pages | : 480 |
Release | : 2009 |
Genre | : Business & Economics |
ISBN | : 0195162072 |
This book integrates and assesses the vast and rapidly growing literature on strategic leadership, which is the study of top executives and their effects on organizations. The basic premise is that in order to understand why organizations do the things they do, or perform the way they do, we need to deeply comprehend the people at the top-- their experiences, abilities, values, social connections, aspirations, and other human features. The actions--or inactions--of a relatively small number of key people at the apex of an organization can dramatically affect organizational outcomes. The scope of strategic leadership includes individual executives, especially chief executive officers (CEOs), groups of executives (top management teams, or TMTs); and governing bodies (particularly boards of directors). Accordingly, the book addresses an array of topics regarding CEOs (e.g., values, personality, motives, demography, succession, and compensation); TMTs (including composition, processes, and dynamics); and boards of directors (why boards look and behave the way they do, and the consequences of board profiles and behaviors). Strategic Leadership synthesizes what is known about strategic leadership and indicates new research directions. The book is meant primarily for scholars who strive to assess and understand the phenomena of strategic leadership. It offers a considerable foundation on which professionals involved in executive search, compensation, appraisal and staffing, as well as board members who evaluate executive performance and potential, might build their tools and perspectives.
Author | : Lukas Hengartner |
Publisher | : Springer Science & Business Media |
Total Pages | : 224 |
Release | : 2007-12-31 |
Genre | : Business & Economics |
ISBN | : 3835093916 |
Lukas Hengartner shows that both firm complexity and managerial power are associated with higher pay levels. This suggests that top managers are paid for the complexity of their job and that more powerful top managers receive pay in excess of the level that would be optimal for shareholders.
Author | : Sarah Burrows |
Publisher | : |
Total Pages | : 61 |
Release | : 2018 |
Genre | : |
ISBN | : |
Using social comparison and social network theory, I sought to examine the corporate governance antecedents of top management team (TMT) horizontal pay dispersion that may be interpreted as unjustifiable reasons of pay dispersion and therefore undermine firm performance. I therefore examined compensation data from firms appearing on the S&P500 from 2008 to 2013 and ran panel regressions. This paper adds to the existing literature, as it is one of the first studies to explicitly examine the corporate governance mechanisms that affect TMT pay dispersion. I hope these findings can remedy the continuance of ineffective compensation practices which lead to unjustified pay dispersion among executives and in turn harm firm performance.
Author | : Kin-Wai Lee |
Publisher | : |
Total Pages | : |
Release | : 2008 |
Genre | : |
ISBN | : |
Much of the research on management compensation focuses on the level and structure of executives' pay. In this study, we examine a compensation element that has not received so far considerable research attention - the dispersion of compensation across managers - and its impact on firm performance. We examine the implications of two theoretical models dealing with pay dispersion - tournament vs. equity fairness. Tournament theory stipulates that a large pay dispersion provides strong incentives to highly qualified managers, leading to higher efforts and improved enterprise performance, while arguments for equity fairness suggest that greater pay dispersion increases envy and dysfunctional behaviour among team members, adversely affecting performance. Consistent with tournament theory, we find that firm performance, measured by either Tobin's Q or stock performance, is positively associated with the dispersion of management compensation. We also document that the positive association between firm performance and pay dispersion is stronger in firms with high agency costs related to managerial discretion. Furthermore, effective corporate governance, especially high board independence, strengthens the positive association between firm performance and pay dispersion. Our findings thus add to the compensation literature a potentially important dimension: managerial pay dispersion.
Author | : Annaloes M.L. Raes |
Publisher | : Business Expert Press |
Total Pages | : 139 |
Release | : 2011-08-29 |
Genre | : Business & Economics |
ISBN | : 1606491806 |
This book provides an overview of the organizational mechanisms of TMT impact. When having finished this book, readers will know how a TMT exerts influence and have more insight in how to make TMTs more effective in their organizations. Insight into the ways in which TMTs influence their organizations can benefit practicing top managers, as well as non-executive directors, consultants, team coaches etc. It may help them in establishing early indicators of organizational performance, selecting new TMT members, diagnosing dysfunctional TMT behavior, and assessing the TMT's interaction with middle managers. Therefore, I expect this book to be interesting for a wide audience of practitioners and researchers.
Author | : Lucian A. Bebchuk |
Publisher | : Harvard University Press |
Total Pages | : 308 |
Release | : 2004 |
Genre | : Business & Economics |
ISBN | : 9780674020634 |
The company is under-performing, its share price is trailing, and the CEO gets...a multi-million-dollar raise. This story is familiar, for good reason: as this book clearly demonstrates, structural flaws in corporate governance have produced widespread distortions in executive pay. Pay without Performance presents a disconcerting portrait of managers' influence over their own pay--and of a governance system that must fundamentally change if firms are to be managed in the interest of shareholders. Lucian Bebchuk and Jesse Fried demonstrate that corporate boards have persistently failed to negotiate at arm's length with the executives they are meant to oversee. They give a richly detailed account of how pay practices--from option plans to retirement benefits--have decoupled compensation from performance and have camouflaged both the amount and performance-insensitivity of pay. Executives' unwonted influence over their compensation has hurt shareholders by increasing pay levels and, even more importantly, by leading to practices that dilute and distort managers' incentives. This book identifies basic problems with our current reliance on boards as guardians of shareholder interests. And the solution, the authors argue, is not merely to make these boards more independent of executives as recent reforms attempt to do. Rather, boards should also be made more dependent on shareholders by eliminating the arrangements that entrench directors and insulate them from their shareholders. A powerful critique of executive compensation and corporate governance, Pay without Performance points the way to restoring corporate integrity and improving corporate performance.
Author | : Luis R. Gomez-Mejia |
Publisher | : Routledge |
Total Pages | : 366 |
Release | : 2014-12-18 |
Genre | : Business & Economics |
ISBN | : 1317473957 |
This up-to-date, research-oriented textbook focuses on the relationship between compensation systems and firm overall performance. In contrast to more traditional compensation texts, it provides a strategic perspective to compensation administration rather than a functional viewpoint. The text emphasizes the role of managerial pay, its importance, determinants, and impact on organizations. It analyzes recent topics in executive compensation, such as pay in high technology firms, managerial risk taking, rewards in family companies, and the link between compensation and social responsibility and ethical issues, among others. The authors provide a thorough and comprehensive review of the vast literatures relevant to compensation and revisit debates grounded in different theoretical perspectives. They provide insights from disciplines as diverse as management, economics, sociology, and psychology, and amplify previous discussions with the latest empirical findings on compensation, its dynamics, and its contribution to firm overall performance.
Author | : Sanghyuk Byun |
Publisher | : |
Total Pages | : |
Release | : 2012 |
Genre | : Corporations |
ISBN | : |
"This dissertation consists of two essays. The first chapter of this dissertation examines the relation between pay dispersion among top executives and firm performance, executive turnover, and earnings management ... The second chapter of this dissertation investigates a sample of larger publicly-traded US companies with a designated investor relations (IR) executive, who is among the top five paid employees."--Page iii.
Author | : Yaakov Weber |
Publisher | : Emerald Group Publishing |
Total Pages | : 224 |
Release | : 2019-11-29 |
Genre | : Business & Economics |
ISBN | : 1838672494 |
This book provides cross-disciplinary management research that integrates theories, concepts, and perspectives from two or more scientific disciplines. It aims to resolve complex theoretical problems within multiple industries, fields and areas of management including mergers, SMEs, hospitality, and healthcare.