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    When much more of a difference makes a difference: Social comparison and tournaments in the CEO's top team


    Ridge, Jason W. and Aime, Frederico and White, Margaret A. (2015) When much more of a difference makes a difference: Social comparison and tournaments in the CEO's top team. Strategic Management Journal, 36 (4). pp. 618-636. ISSN 0143-2095

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    Abstract

    We integrate the seemingly contradictory theoretical predictions of behavioral and economic perspectives about the relationship between pay disparity and firm performance and show that tournament and social comparison theories are more supplementary than contradictory in nature. Our results show that high levels of firm performance will be found around either meaningfully low or meaningfully high levels of pay disparity. Additional findings indicate that this curvilinear relationship is weakened in the presence of both an heir apparent and high CEO power, and strengthened when top management team members are more eligible as CEOs. These findings suggest that factors that increase or inhibit social comparison or tournament perceptions among TMT members play a role in the strength of the curvilinear relationship between pay disparity and firm performance.

    Item Type: Article
    Keywords: pay dispersion; social comparison theory; tournament theory; CEO heir apparent; CEO duality;
    Academic Unit: Faculty of Social Sciences > School of Business
    Item ID: 11275
    Identification Number: https://doi.org/10.1002/smj.2227
    Depositing User: Margaret White
    Date Deposited: 14 Oct 2019 16:22
    Journal or Publication Title: Strategic Management Journal
    Publisher: John Wiley & Sons, Inc
    Refereed: Yes
    URI:

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