Do heavily-unionized companies compensate their CEOs less in periods of financial distress? Evidence from Canadian companies during the financial crisis
Muhammad Umar Boodoo
LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library
Abstract:
This paper studies the strategic interaction between employee stakeholders, in particular labor unions, and top management, and evaluates the effect of the two parties’ inherent competitive rent-seeking behavior on CEO pay. Using a panel of firms listed on the S&P/TSX composite index, this paper finds that CEO compensation withstood the financial crisis despite lower and even negative corporate performance. Further, heavily-unionized companies were associated with higher CEO pay in terms of non-equity elements such as salary and pension allocations. The presence of unions had no observed effect in reducing bonuses, stock options, and restricted stock units. These findings have implications for the debate on income inequality, and the power of unions to bring about change.
Keywords: Executive labor market; Economic inequality; Executive pay; Labor union; Great Recession. (search for similar items in EconPapers)
JEL-codes: J1 (search for similar items in EconPapers)
Date: 2018-03-01
New Economics Papers: this item is included in nep-lab
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Citations:
Published in Industrial and Labor Relations Review, 1, March, 2018, 71(2), pp. 306-328. ISSN: 0019-7939
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:69601
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