The dispersion of bonus payments within and between firms

Christian Grund and Tanja Hofmann
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Tanja Hofmann: RWTH Aachen University

Journal of Business Economics, 2019, vol. 89, issue 4, No 3, 417-445

Abstract: Abstract We explore the dispersion of bonus payments of managers within and between five large firms from the German chemical sector and disentangle the dispersion within and between levels of the hierarchy. We use data from a yearly salary survey in these firms during the observation period 2008 to 2013. Bonus payments account for one quarter of yearly base salaries on average. Both the amount and the dispersion of bonus-to-base ratios differ across firms. We disentangle the dispersion between and within the levels of firms’ hierarchies. Revealed differences, which are consistent with differences in firms’ value statements, suggest that there is no one best incentive system of a firm.

Keywords: Bonus payments; Bonus to base rate; Firm differences; Pay policies; Wage dispersion (search for similar items in EconPapers)
JEL-codes: J31 J33 M52 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (3)

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Working Paper: The Dispersion of Bonus Payments within and between Firms (2017)
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DOI: 10.1007/s11573-018-0920-x

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