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The Dispersion of Bonus Payments within and between Firms

Christian Grund and Tanja Hofmann
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Tanja Hofmann: RWTH Aachen University

No 10642, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We explore the dispersion of bonus payments of managers within and between five large firms from the German chemical sector. We use data from a yearly salary survey in these firms during the observation period 2008 to 2013. Bonus payments account for 20 percent of 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 are consistent with differences in firms' value statements.

Keywords: pay policies; firm differences; bonus to base rate; bonus payments; wage dispersion (search for similar items in EconPapers)
JEL-codes: J31 J33 M52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-eur, nep-hrm and nep-lma
Date: 2017-03
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Published in: Journal of Business Economics, 2019, 89 (4), 417-445

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