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Top Management Team Pay Dispersion: The Role of Environment and Corporate Governance

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Top Management Team Pay Dispersion: The Role of Environment and Corporate Governance

Rozé Bianchi, Marilou (2016) Top Management Team Pay Dispersion: The Role of Environment and Corporate Governance. Masters thesis, Concordia University.

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Abstract

This paper explores TMT pay dispersion in lone founder firms. The scarcity of the literature on this topic provides an opportunity to study the influence of extra- and intra-organizational factors on TMT pay dispersion. Knowing that high pay dispersion hurts firm performance, it is important to understand its antecedents. Based on panel data analyses of all S&P500 firms from 2008-2013, my results demonstrate that lone founder firms exhibit less pay dispersion than other firms. It seems that when founders are present on their firms’ board of directors, the effective monitoring of firm managers makes it redundant to offer the latter high incentive pay that would fuel pay dispersion. Regarding extra-organizational factors, recession appears to increase TMT pay dispersion, particularly in lone founder firms – possibly because lone founder firms regularly use attractive pay packages to hire talent from competitors during economic downturns and thereby foster pay dispersion. Finally, high-tech industries are negatively related to pay dispersion. The complexity of managerial tasks in such industries makes it necessary to pay all (rather than some) managers relatively high compensation, limiting pay dispersion.

Divisions:Concordia University > John Molson School of Business > Finance
Item Type:Thesis (Masters)
Authors:Rozé Bianchi, Marilou
Institution:Concordia University
Degree Name:M. Sc.
Program:Administration (Finance option)
Date:8 December 2016
Thesis Supervisor(s):Ravi, Rahul and Jaskiewicz, Peter
ID Code:982066
Deposited By: Marilou Rozé Bianchi
Deposited On:09 Jun 2017 15:16
Last Modified:18 Jan 2018 17:54
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