Upper‐echelon executive human capital and compensation: Generalist vs specialist skills | Zendy

Datta Sudip | Zendy; IskandarDatta Mai | Zendy

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Upper‐echelon executive human capital and compensation: Generalist vs specialist skills

Author(s) -

Datta Sudip,

IskandarDatta Mai

Publication year - 2014

Publication title -

strategic management journal

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 11.035

H-Index - 286

eISSN - 1097-0266

pISSN - 0143-2095

DOI - 10.1002/smj.2267

Subject(s) - executive compensation , compensation (psychology) , business , chief executive officer , generalist and specialist species , insider , human capital , accounting , economics , management , finance , corporate governance , market economy , psychology , ecology , habitat , psychoanalysis , biology , political science , law

This study extends current knowledge of upper echelon executive compensation beyond the CEO , specifically CFO compensation, based on whether they possess generalist or specialist skills. We find that “strategic” CFO s with an elite MBA (generalist) consistently command a compensation premium, while “accounting” CFO s (specialist) and CFO s with a non‐ MBA master's degree, even from an elite institution, do not. Further, scarce “strategic” CFO s are awarded both higher salaries and higher equity‐based compensation. Our findings support the view that unique complementarities between scarce CFO s and firms increase these executives' bargaining power leading to pay premium. Our results are robust to post‐hiring years, firm sizes, board characteristics, and CFO 's insider/outsider status. We contribute at the confluence of upper‐echelon compensation, executive human capital, resource‐based view, and assortative matching literatures . Copyright © 2014 John Wiley & Sons, Ltd.

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