Pay structure implications for turnover in the CEO's top team

Ridge, Jason; Hill, Aaron; Aime, Federico; Petrenko, Oleg V.
January 2012
Academy of Management Annual Meeting Proceedings;2012, Vol. 2012 Issue 1, p1
Conference Proceeding
We extend our theoretical understanding of the effect of pay structure on turnover within the CEO's top team. Our findings indicate that pay dispersion and pay disparity have unique and opposite effects on turnover within the CEO's top team. Further, we find that pay dispersion and pay disparity interact both with each other as well as with the overall pay level in comparison to the market to predict top team member turnover. These findings result from a multi-industry sample of pay structure over a 14-year period. Our results challenge existing arguments that pay dispersion and pay disparity have either similar or context specific effects on executive actions. Rather, we find that elements of executive pay structure have both independent and contrasting effects while also interacting to influence the actions of members of the CEO's top team.


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