Payoffs for layoffs? An examination of CEO relative pay and firm performance surrounding layoff announcements
| Autor: | Rebecca R. Kehoe, F. Scott Bentley, Ingrid Smithey Fulmer |
|---|---|
| Přispěvatelé: | Bentley, F Scott, Fulmer, Ingrid S, Kehoe, Rebecca R |
| Jazyk: | angličtina |
| Rok vydání: | 2019 |
| Předmět: |
Social comparison theory
Organizational Behavior and Human Resource Management Labour economics Layoff ComputingMilieux_THECOMPUTINGPROFESSION 05 social sciences ComputingMilieux_LEGALASPECTSOFCOMPUTING social comparisons layoffs GeneralLiterature_MISCELLANEOUS firm performance ComputingMilieux_MANAGEMENTOFCOMPUTINGANDINFORMATIONSYSTEMS 0502 economics and business CEO pay 050207 economics Psychology 050203 business & management Applied Psychology |
| Popis: | In this study, we theorize that CEOs' peer pay comparisons influence their decisions to engage in layoffs, and we consider the conditions under which layoffs deliver "payoffs" in the form of increases in subsequent CEO relative pay. Empirical results obtained using a unique dataset indicate that a CEO's relative pay in one year negatively relates to the likelihood of the CEO announcing layoffs i the subsequent year. Further, we find that the relationship between layoffs and subsequent changes in CEO relative pay depends on post-layoff changes in firm performance, with CEOs in firms with the largest performance gains receiving the largest increases in relative pay. We also show that our results are robust to an alternative operationalization of CEO relative pay. We provide evidence that external social comparisons may have predictable consequences for both CEOs' propensities to engage in particular strategic actions and future changes in CEOs' relative pay. Refereed/Peer-reviewed |
| Databáze: | OpenAIRE |
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