Who Gets the Lion’s Share? Top Management Group Pay Disparities and Powerful CEOs

Patrick McClelland and Tor Brodtkorb

Management Working Papers from School of Business Administration, American University of Sharjah

Abstract: While the distribution of pay across the hierarchy of corporations has received considerable critical attention, the distribution of pay within top management groups has received comparatively little. This paper contributes to the established literature by moving the debate beyond tournament theory explanations to show that pay disparities within top management groups arise as a function of the distribution of power within them. Based on a sample of 604 publicly-traded firms drawn from the S&P 1500, a theoretical model linking sociopolitical factors in the top management group and top management group pay disparities was tested using hierarchical ordinary least squares (OLS) regression. The results indicate that CEO power plays an important role in the distribution of compensation within top management groups.

Keywords: Top Management Teams/Upper Echelon; Compensation; Bonuses and Benefits; Board of Directors (search for similar items in EconPapers)
Pages: 36 pages
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