TITLE

CEO Compensation as Tournament and Social Comparison: A Tale of Two Theories

AUTHOR(S)
O'Reilly III, Charles A.; Main, Brian G.; Crystal, Graef S.
PUB. DATE
June 1988
SOURCE
Administrative Science Quarterly;Jun88, Vol. 33 Issue 2, p257
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
This study examined economic and psychological factors that may influence the setting of CEO compensation levels and tested both a tournament model and a social comparison model. Using data from 105 Fortune 500 firms, conventional economic determinants such as size and profitability were found to be only weakly related to CEO compensation. A test of a tournament model examined the difference in compensation between the top executive and those in the next hierarchical level. Controlling for other potential economic determinants, no support was found for this theory. Consistent with social comparison theory, however, strong associations were found between CEO compensation and the compensation level of outside members of the board of directors, especially those who serve on the compensation committee.
ACCESSION #
4014001

 

Related Articles

  • Top staff on top pay.  // Travel Weekly: The Choice of Travel Professionals;1/27/2006, Issue 1805, p10 

    The article presents information on the salary packages offered by Holidaybreak PLC. The company's camping division managing director Matthew Cheetham's benefits package was £224,000 in 2005, compared to £178,000 in 2004. It was made up of £182,000 in salary, a £16,000 bonus, and...

  • Using Restricted Exec Bonus Arrangements. Rowles, Matthew L. // National Underwriter / Life & Health Financial Services;6/27/2005, Vol. 109 Issue 25, p27 

    Delves into the different component of a restricted executive bonus arrangement which allows an employer to stay in control and provide the company with income tax deduction. Agreement between employers and executives to add personal life insurance protection; Payment of annual premiums;...

  • CORPORATE OBJECTIVES AND THE EXECUTIVE COMPENSATION PACKAGE. Ellig, Bruce R. // Industrial Management;Sep73, Vol. 15 Issue 9, p5 

    Discusses corporate compensation packages for executive in light of the corporation's objectives. Compensations which should reflect the amount of risk for a commensurate reward; Steps to identifying corporate needs which include considering the industry, the company's relationship to its...

  • ABA Releases Its 36th Annual Compensation & Benefits Survey. Mazur, Michael // Community Banker;Nov2009, Vol. 18 Issue 11, p60 

    The article reports on the 36th annual American Bankers Association (ABA) Compensation & Benefits Survey in the U.S. in 2009. According to the author, the average base salaries of chief executive officers (CEOs) rose by 0.7 percent. He adds that more than 400 banks all over the country...

  • Are Wall Street CEO Compensations a Complete Nonsense? A Comparison Study with Nonfinancial Industry. Park, Jonathan Sheewon // Michigan Journal of Business;Jan2010, Vol. 3 Issue 1, p79 

    In this study, I attempt to examine the differences in executive compensation packages between the financial services industry and nonfinancial industries. Using data from 2000-2005, I investigate whether there are any differences in the CEO compensation level and structure that are not...

  • LOST IN TRANSLATION? Purdum, Traci // Industry Week/IW;Sep2005, Vol. 254 Issue 9, p41 

    Considers the impact of globalization on compensation level for U.S. manufacturing executives. Measures used in determining effective executives; Result of a survey on CEO compensation in the U.S.; Percentage of CEO who view the market for executives as competitive; Factors influencing the...

  • A Little Icing on Top. Bryant, Adam // Newsweek;4/12/1999, Vol. 133 Issue 15, p54 

    Focuses on the chief executive officers (CEO) compensation windfalls in the United States. Growth of executive perquisites such as stock options and corporate jets along with compensation packages; Examples such as Henry Silverman, CEO of Cendant Corp.; Ronald W. Allen's ouster from Delta Air...

  • Is the price right?.  // Oregon Business Magazine;Sep2005, Vol. 28 Issue 9, p26 

    Reports on the rise in the amount of compensation received by chief executive officers (CEO) in Oregon. Factors that contributed to the rise of CEO compensation in the area; Top CEOs in the state in terms of compensation.

  • Pressure is building to better align CEO pay with performance.  // Corporate Board;Jul/Aug2006, Vol. 27 Issue 159, p27 

    The article discusses the result of the "2005 CEO Compensation Survey," conducted by Mercer Human Resource Consulting in the U.S. The survey indicates that the median CEO base salary remained flat at $975,000. Moreover, almost one-third of the CEOs received no base salary increase during the...

Share

Read the Article

Courtesy of THE LIBRARY OF VIRGINIA

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics