Do entrenched managers pay their workers more?
(2009) In Journal of Finance 64(1). p.309-339- Abstract
Analyzing a panel that matches public firms with worker-level data, we find that managerial entrenchment affects workers' pay. CEOs with more control pay their workers more, but financial incentives through cash flow rights ownership mitigate such behavior. Entrenched CEOs pay more to employees closer to them in the corporate hierarchy, geographically closer to the headquarters, and associated with conflict-inclined unions. The evidence is consistent with entrenched CEOs paying more to enjoy private benefits such as lower effort wage bargaining and improved social relations with employees. Our results show that managerial ownership and corporate governance can play an important role for employee compensation.
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/ab1411ca-fb6e-4c74-b41e-449359af87cf
- author
- Cronqvist, Henrik ; Heyman, Fredrik LU ; Nilsson, Mattias LU ; Svaleryd, Helena and Vlachos, Jonas
- publishing date
- 2009-02
- type
- Contribution to journal
- publication status
- published
- subject
- in
- Journal of Finance
- volume
- 64
- issue
- 1
- pages
- 31 pages
- publisher
- Wiley-Blackwell
- external identifiers
-
- scopus:58949087712
- ISSN
- 0022-1082
- DOI
- 10.1111/j.1540-6261.2008.01435.x
- language
- English
- LU publication?
- no
- id
- ab1411ca-fb6e-4c74-b41e-449359af87cf
- date added to LUP
- 2021-10-18 11:05:44
- date last changed
- 2022-03-19 03:34:29
@article{ab1411ca-fb6e-4c74-b41e-449359af87cf, abstract = {{<p>Analyzing a panel that matches public firms with worker-level data, we find that managerial entrenchment affects workers' pay. CEOs with more control pay their workers more, but financial incentives through cash flow rights ownership mitigate such behavior. Entrenched CEOs pay more to employees closer to them in the corporate hierarchy, geographically closer to the headquarters, and associated with conflict-inclined unions. The evidence is consistent with entrenched CEOs paying more to enjoy private benefits such as lower effort wage bargaining and improved social relations with employees. Our results show that managerial ownership and corporate governance can play an important role for employee compensation.</p>}}, author = {{Cronqvist, Henrik and Heyman, Fredrik and Nilsson, Mattias and Svaleryd, Helena and Vlachos, Jonas}}, issn = {{0022-1082}}, language = {{eng}}, number = {{1}}, pages = {{309--339}}, publisher = {{Wiley-Blackwell}}, series = {{Journal of Finance}}, title = {{Do entrenched managers pay their workers more?}}, url = {{http://dx.doi.org/10.1111/j.1540-6261.2008.01435.x}}, doi = {{10.1111/j.1540-6261.2008.01435.x}}, volume = {{64}}, year = {{2009}}, }