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Shin,Taekjin

Fair Play or Power Play? Pay Equity,Managerial Power,and Compenstion Adjustments for CEOs - 419-448

This study examines how firms use bench-marking information about peers to determine the compensation that they offer to chief executive officers (CEOs) .It jointly addresses two distinct perspectives : pay equity and managerial power.Pay inequity provides strong motivation for CEOs to restore equity by promoting the logic of external fairness and urging boards of directors to implement peer bench marking and adjust the focal CEO's compensation levels.Although pay inequity may motivate CEOs to restore equity,their reaction to inequity may be effective only when they have sufficient power ove the board of directors to influence the pay-setting process.Results from a sample of 1,555 CEOs generally support predictions about the moderating effects of CEO power in the relationship between a focal

Subjects--Index Terms: CEO compensation pay equity managerial power compensation benchmarking

LC Class. No.: / 5555571JA3