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Industry Tournament Incentives

Jeffrey L. Coles¹; Zhichuan Li²; Albert Y. Wang³

¹ David Eccles School of Business, University of Utah · ² Richard Ivey School of Business, University of Western Ontario · ³ Raymond J. Harbert College of Business, Auburn University

We empirically assess industry tournament incentives for CEOs, as measured by the compensation gap between a CEO at one firm and the highest-paid CEO among similar (industry, size) firms. We find that firm performance, firm risk, and the riskiness of firm investment and financial policies are positively associated with the external industry pay gap. The industry tournament effects are stronger when industry, firm, and executive characteristics indicate high CEO mobility and a higher probability of the aspirant executive winning. (

DOI

10.1093/rfs/hhx064

Volume

31 (4)

Pages

1418-1459

Language

en

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BibTeX

Sources

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