In:
ILR Review, SAGE Publications, Vol. 68, No. 1 ( 2015-01), p. 53-78
Abstract:
The authors examine factors influencing the executive pay multiple (executive-employee pay disparity) and its effects on performance. Using unique data from Korea, where all publicly listed firms are required to provide detailed information on average employee pay in their annual reports, they find that a substantial portion of cross-sectional variation in the executive pay multiple is explained by the firm’s economic and political characteristics. Results also indicate that the executive pay multiple has a statistically significant negative relation with subsequent operating and stock return performance. A two-stage approach, however, reveals that the performance effects of the executive pay multiple are likely to be influenced more by deviations from the expected executive pay multiple, estimated using the first-stage determinant model, than by the absolute pay multiple per se. The study sheds light on recent debates regarding the usefulness of executive pay multiple disclosure.
Type of Medium:
Online Resource
ISSN:
0019-7939
,
2162-271X
DOI:
10.1177/0019793914556242
Language:
English
Publisher:
SAGE Publications
Publication Date:
2015
detail.hit.zdb_id:
218617-2
detail.hit.zdb_id:
2066463-1
SSG:
7,26
SSG:
3,4
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