2006–2010

Do Entrenched Managers Pay Their Workers More?

Reprint No. 2009:3

Author(s): Henrik Cronqvist, Fredrik Heyman, Mattias Nilsson, Helena Svaleryd and Jonas VlachosYear: 2009 Title: Journal of Finance Volume (No.): 64 (1) Pages: 309–339
Online article (restrictions may apply)


Analyzing a panel that matches public firms with worker-level data, we find that managerial entrenchment affects workers’ pay. CEOs with more control pay their workers more, but financial incentives through cash flow rights ownership mitigate such behavior. Entrenched CEOs pay more to employees closer to them in the corporate hierarchy, geographically closer to the headquarters, and associated with conflict-inclined unions. The evidence is consistent with entrenched CEOs paying more to enjoy private benefits such as lower effort wage bargaining and improved social relations with employees. Our results show that managerial ownership and corporate governance can play an important role for employee compensation.


Reference:
Cronqvist, Henrik, Fredrik Heyman, Mattias Nilsson, Helena Svaleryd and Jonas Vlachos (2009), "Do Entrenched Managers Pay Their Workers More?". Journal of Finance 64(1), 309–339.

Fredrik Heyman

Contact

Ph: +46 8 665 4537
fredrik.heyman@ifn.se

Jonas Vlachos

Contact

Ph: +46 8 16 30 46
Mob: +46 70 893 3240
jonas.vlachos@ne.su.se

An Agenda for Europe

Institutional Reform for Innovation and Entrepreneurship

Omslag 2017 Institutional Reform for Innovation and Entrepreneurship.jpg

The authors of this book, Niklas Elert, Magnus Henrekson and Mikael Stenkula, advise the economies of the European Union to become more entrepreneurial in promoting innovation and economic growth. The authors propose a reform strategy with respect to several aspects to achieve this goal.

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