TMT pay dispersion and firm performance: the moderating role of organizational governance effectiveness

2015 ◽  
Vol 21 (4) ◽  
pp. 436-459 ◽  
Author(s):  
Gregorio Sanchez-Marin ◽  
J. Samuel Baixauli-Soler
Keyword(s):  
Firm Performance ◽  
Top Management Team ◽  
Management Team ◽  
Top Management ◽  
Job Complexity ◽  
Organizational Governance ◽  
The Board Of Directors ◽  
Pay Dispersion ◽  
Performance Examining ◽  
Organizational Hierarchies

AbstractThis study supports tournament theory in relation to high levels of organizational hierarchies, indicating that the job complexity facing the top management team supposes that pay dispersion positively influences firm performance. Examining a sample of 709 firm-year observations of Spanish listed companies spanning the period 2004–2012, our results indicate that the association between firm performance and top management team pay dispersion is conditional on the effectiveness of corporate governance. High top management team pay dispersion is associated with better performance in owner-controlled firms, where more effective monitoring is exerted by the board of directors.

Founder Versus Family Owners’ Impact on Pay Dispersion Among Non-CEO Top Managers: Implications for Firm Performance

2014 ◽  
Vol 43 (5) ◽  
pp. 1524-1552 ◽  
Author(s):  
Peter Jaskiewicz ◽  
Joern H. Block ◽  
Danny Miller ◽  
James G. Combs
Keyword(s):  
Firm Performance ◽  
Top Management Team ◽  
Management Team ◽  
Test Theory ◽  
Top Management ◽  
Panel Analysis ◽  
Top Managers ◽  
Pay Dispersion

Emerging evidence suggests that pay dispersion among non-CEO top management team (TMT) members harms firm performance, which raises questions about why firms’ owners tolerate or even support it. Prior research shows that the key distinction between founder and family owners is that in addition to firm performance and growth goals, family owners pursue socioemotional goals. On the basis of this distinction, we develop and test theory linking founders’ and families’ ownership to TMT pay dispersion. Consistent with our theory, a Bayesian panel analysis of Standard & Poor’s 500 firms shows that founder owners use less TMT pay dispersion and that family owners, relative to founder owners, use more, although that declines across generations. We also provide evidence that TMT pay dispersion harms firm performance. Our theory and results are significant because they help to explain why some owners favor compensation practices that cause TMT pay dispersion, despite evidence that this harms firm performance.

Pay dispersion among the top management team and outside directors: Its impact on firm risk and firm performance

2017 ◽  
Vol 57 (1) ◽  
pp. 177-192 ◽  
Author(s):  
Pankaj C. Patel ◽  
Mingxiang Li ◽  
María del Carmen Triana ◽  
Haemin Dennis Park
Keyword(s):  
Firm Performance ◽  
Top Management Team ◽  
Management Team ◽  
Top Management ◽  
Outside Directors ◽  
Firm Risk ◽  
Pay Dispersion

scholarly journals Top management team faultlines and firm performance: Examining the CEO-TMT interface

2017 ◽  
Vol 28 (6) ◽  
pp. 741-758 ◽  
Author(s):  
Dimitrios Georgakakis ◽  
Peder Greve ◽  
Winfried Ruigrok
Keyword(s):  
Firm Performance ◽  
Top Management Team ◽  
Management Team ◽  
Top Management ◽  
Performance Examining
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