Organizational differences in managerial compensation and financial performance

Article Abstract:

This study had two general focuses. First, after reviewing the literature on compensation strategy, we examined the extent to which organizations facing similar conditions make different managerial compensation decisions regarding base pay, bonus pay, and eligibility for long-term incentives. Second, working from expectancy and agency theory perspectives, we explored the consequences of those decisions for organizational performance. Using longitudinal data on about 14,000 top- and middle-level managers and 200 organizations, we found significant differences between organizations. Our results suggest that organizations tend to make different decisions about pay contingency, or variability, rather than about base pay. Findings indicate that contingent pay was associated with financial performance but base pay was not. (Reprinted by permission of the publisher.)

Management research, Organizational research

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Determinants of faculty pay: an agency theory perspective

Article Abstract:

This study tested 12 hypotheses on the determinants of faculty pay using an agency theory perspective. The sample consisted of 353 professors of management. Data were collected from survey responses, curricula vitae, and the Social Science Citation Index. Results show that the primary determinants of faculty pay, in both institutions that grant doctorates and those that do not, are the number of top-tier journal publications a faculty member has authored and changes in institutional affiliation. Teaching performance and numbers of citations, second-tier publications, and books published affect pay allocations only for faculty members who have exceptional research records. (Reprinted by permission of the publisher.)

Analysis, College teachers, College faculty, Agency theory

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Relationships among risk, incentive pay, and organizational performance

Article Abstract:

In this study, we extended agency-based research by examining the role of risk in the structure of managerial compensation and its relationship to organization performance. Our results suggest that organizations facing higher risk do not place greater emphasis on short-term incentives than other organizations - rather, they place less emphasis on them. Also, higher-risk firms that relied on incentive pay exhibited poorer performance than higher-risk firms that did not emphasize incentive pay. (Reprinted by permission of the publisher.)

Performance, Risk (Economics), Employee incentives, Executives, Executive compensation, Organizational effectiveness

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