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The Effects of Abnormal Executive Pay Dispersion: Evidence from Firm Performance and Executive Turnover
Author(s) -
Byun Sanghyuk
Publication year - 2014
Publication title -
asia‐pacific journal of financial studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.375
H-Index - 15
eISSN - 2041-6156
pISSN - 2041-9945
DOI - 10.1111/ajfs.12062
Subject(s) - dispersion (optics) , turnover , executive compensation , business , accounting , demographic economics , economics , management , finance , corporate governance , physics , optics
This study examines the relation between pay dispersion among top executives and firm performance and executive turnover. I find that deviations from normal dispersion are associated with deterioration in firm performance and higher executive turnover. I also document that a positive relation between abnormal pay dispersion and executive turnover is driven by low‐ranked executives. This study contributes to the existing literature by suggesting that abnormal pay dispersion is an important factor that influences managerial behavior in addition to raw pay dispersion.