Compensation Benchmarking, Leapfrogs, and the Surge in Executive Pay  

Oleh:

DiPrete, Thomas A. ; Eirich, Gregory M. ; Pittinsky, Matthew

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: AJS: American Journal of Sociology vol. 115 no. 06 (May 2010), page 1671-1712.
Topik: Compensation Benchmarking; Leapfrogs; Chief Executive Officer (CEO)
Fulltext: The American Journal of Sociology, Vol. 115, No. 6 (May 2010), pp. 1671-1712.pdf (518.9KB)

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Perpustakaan PKPM Nomor Panggil: A13 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Scholars frequently argue whether the sharp rise in chief executive officer (CEO) pay in recent years is "efficient" or is a consequence of "rent extraction" because of the failure of corporate governance in individual firms. This article argues that governance failure must be conceptualized at the market rather that the firm level because excessive pay increases for even relatively few CEOs a year spread to other firms through the cognitively and theoretically constructed compensation networks of "peer groups," which are used in the benchmarking process to negotiate the compensation of CEOs. Counterfactual simulation based on Standard and Poor's Executive Comp data demonstrates that the effects of CEO "leapfrogging" potentially explain a considerable fraction of the overall upward movement of executive compensation since the early 1990s.

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