TITLE

TOP MANAGEMENT TEAM COORDINATION NEEDS AND THE CEO PAY GAP: A COMPETITIVE TEST OF ECONOMIC AND BEHAVIORAL VIEWS

AUTHOR(S)
Henderson, Andrew D.; Fredrickson, James W.
PUB. DATE
February 2001
SOURCE
Academy of Management Journal;Feb2001, Vol. 44 Issue 1, p96
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
The need for coordinated decision making bears on the pay gap between a firm's CEO and its other top executives. A behavioral view suggests that because more equal pay promotes collaboration, greater coordination needs encourage smaller pay gaps, and the combination of greater needs and smaller gaps enhances firm performance. An economic view implies the opposite because larger gaps create tournament-like incentives that address monitoring problems associated with joint decisions. The authors found that although economic theory was a better predictor of the size of CEO pay gaps, there was a balance between the economic and behavioral views as predictors of firm performance.
ACCESSION #
4131597

 

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