The Tide that lifts all boats? Acquisitions and CEO-TMT pay disparity in the Netherlands
| Autor: | Padmavathi Rao Sahib, Hans van Ees, Gerwin van der Laan |
|---|---|
| Přispěvatelé: | Research programme GEM, Liberal Arts and Sciences, Research Group: Strategy and Organization |
| Jazyk: | angličtina |
| Rok vydání: | 2018 |
| Předmět: |
Labour economics
MERGERS Context (language use) Management Science and Operations Research RISK-TAKING Organic growth Executive compensation 0502 economics and business TOP MANAGEMENT Top management 050207 economics TEAM Firm strategy Compensation (psychology) 05 social sciences CEO-TMT pay disparity BOARD PERFORMANCE General Business Management and Accounting INCENTIVES Incentive MARKET FIRM Acquisitions Business 050203 business & management EXECUTIVE-COMPENSATION Tournament theory |
| Zdroj: | Management Decision, 56(9), 2038-2059. Emerald Group Publishing Limited Management Decision, 56(9), 2038-2059. Emerald Group Publishing Ltd. |
| ISSN: | 1758-6070 0025-1747 |
| DOI: | 10.1108/MD-08-2017-0804 |
| Popis: | Purpose The purpose of this paper is to examine how firm growth, and its decomposition into acquisitive and organic growth, can serve as an antecedent to the disparity in pay between the CEO and other top management team (TMT) members. Design/methodology/approach Drawing on tournament theory, the authors argue that acquisitive and organic growth strategies have different effects on CEO-TMT pay disparity. Findings The authors find that acquisitive growth, measured through the number and size of acquisitions, increases CEO-TMT pay disparity while organic growth has no effect on CEO-TMT pay disparity. Practical implications The findings, based in the context of the Netherlands, imply that boards in their monitoring activity may need to take into account the potential incentive effects of acquisitive activity as CEOs may have a greater motivation to engage in acquisitions than their fellow TMT members. Originality/value This paper contributes to the literature on relative compensation and incentives and the literature on managerial compensation and firm strategy. To investigate the role of firm growth in increasing CEO-TMT pay disparity, the authors adopt a fine-grained approach along two dimensions. First, the authors disaggregate firm growth into organic and acquisition driven firm growth. Second, the authors disaggregate pay disparity in these components. |
| Databáze: | OpenAIRE |
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