University vice-chancellor pay, performance and (asymmetric) benchmarking

Adelina Gschwandtner () and Richard McManus ()

Studies in Economics from School of Economics, University of Kent

Abstract: We study the pay of UK universities chief executives (‘vice-chancellors’) over a ten year period. Although there is a correlation between pay and performance, with better performing institutions paying higher salaries, we find limited evidence that this relationship is causal; that is, we find no statistically significant link that a change in pay leads to a change in performance, or vice-versa. Instead, we find strong support for an asymmetric benchmarking behaviour, where those institutions with below average pay increase their vice-chancellor’s salaries quicker than those with above average pay. We simulate a model whereby different institutions target different places of the distribution of salaries and demonstrate that inflation of pay can be explained by this behaviour.

Keywords: Executive Compensation; Performance Pay; Efficiency Wages; Benchmark (search for similar items in EconPapers)
JEL-codes: G3 J33 Z13 (search for similar items in EconPapers)
Date: 2018-05
New Economics Papers: this item is included in nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.kent.ac.uk/economics/repec/1807.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ukc:ukcedp:1807

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Studies in Economics from School of Economics, University of Kent School of Economics, University of Kent, Canterbury, Kent, CT2 7FS.
Bibliographic data for series maintained by Dr Anirban Mitra ().