Rent Sharing and the Compensation of Head Coaches in Power Five College Football

The monopoly and monopsony power of intercollegiate sports create significant rents, but previous studies of intercollegiate football coaches’ salaries implicitly assume that coaches are paid their marginal revenue products. In a two-stage estimation, we show that coaches share in these rents. The first stage shows that several common measures of coaches’ productivity do not affect an athletic department’s variable revenue. When we include these measures in the second-stage salary equation, their impact on pay reflects bargaining power, not productivity. We also find that several measures of fixed revenue, which are independent of the coach’s performance, increase the coach’s pay.     

Opening the Black Box: The Internal Labor Markets of Company X

This paper sets out to analyze an internal data set on a Taiwanese auto dealer employing three distinct types of workers. The effects of jobs and levels are positive on both the salary and bonus equations, albeit smaller under a fixed effects than under OLS; however, when factoring in individual fixed effects, the reductions in the bonus equations are greater than those in the salary equations. With changing economic conditions, any consequent variations are greater in bonuses than in salaries, with the most extreme variations being felt by higher ranking employees than lower-level workers. Promotion premiums between levels are smaller than the average differences in pay, and although wage variations do exist within and between levels, the greater effect is on bonuses rather than salaries. The variations in both salaries and bonuses, defined by the coeffficient variations, are also greater in those years when demand is high, as opposed to years of low demand. Entry and exit behavior is observed at all levels, although it is more likely to occur among the lower levels of the hierarchy. Finally, we present strong evidence in support of the cohort effect. Overall, our findings confirm the prevalence of internal labor market (ILM) theories.     

Being Different Can Hurt: Effects of Deviation from Physical Norms on Lawyers' Salaries

A recent federal appeals court ruling barred employment bias against obese people. A reconsideration of the association between being overweight and salary is therefore in order. This article examines the effect of being overweight and thin on lawyers' salaries as reported in the 1984 National Lawyer Survey. Using regression models derived from the clinical nutrition literature as well as models based on the lawyers in the sample themselves,we find an effect of being overweight on salary for men and not for women attorneys. There is also an effect of being thin on men's but not on women's salaries. Importantly, the influence of thinness means that the effect of weight on salary is not linear. We suggest that the relationship between salaries and appearance may result from social perceptions of people deviating from an "ideal" physique.     

An Explanation of Top Executive Pay: A UK Study

This study extends prior research by separating executive remuneration into salary and annual bonus for the purpose of empirically verifying their determinants. A model is introduced to estimate the extent to which pay and its determinants are related. Based on a net sample of 90 large UK firms, salary was found to be strongly related to firm size, as opposed to annual bonus, which was modestly associated with both firm performance and size. An important discovery was that salary showed no relationship to a firm's economic performance. The inability to find any association between salary and performance suggests that each component of pay has a different set of determining factors.     

Extreme Wages,Performance, and Superstars in a Market for Footballers

We study the determinants of superstar wage effects, asking whether productivity or popularity‐based explanations are more appropriate. We use longitudinal wage and performance data for workers (players) and firms (teams) from a particular market for sports talent: Major League Soccer (MLS) in the United States. We find evidence that the top earners, whose annual salaries are mostly not accounted for by their past MLS performances, when compared to other footballers, are paid more because they attract significantly higher stadium attendances and thus revenues. There is no evidence that higher residual salary spending by the teams affects their relative performance in football terms, or that the amounts the teams spend on actual talent affect attendances. Taken together, these results suggest that a popularity‐based explanation of superstar wage effects is appropriate among the top earners in this labor market.     

Home Safe: No‐Trade Clauses and Player Salaries in Major League Baseball

In this study, we examine the wage effects of no‐trade clauses in Major League Baseball. Using an accepted player salary equation and data from the 2003–2008 seasons, we find evidence that there is a trade‐off between monetary compensation and the risk reduction provided by a no‐trade clause. The results suggest that players may be able to simultaneously negotiate for a no‐trade clause and higher salaries, but this is constrained when players also seek to guarantee their income stream with long‐term contracts.     

Minimum Pay Scale and Career Length in the NBA

We use data from the National Basketball Association (NBA) to analyze the impact of minimum salaries on an employee's career length. The NBA has a salary structure in which the minimum salary a player can receive increases with the player's years of experience. The NFL has a similar minimum wage policy; research suggests that the introduction of this system shortened career length in the NFL. Using duration analysis, we fail to find evidence that the new multi‐tiered minimum wage scale in the NBA increased the probability of exit.     

Signaling valuable human capital: Advocacy group work experience and its effect on employee pay in innovative firms

Research Summary: The ability of innovative firms to create and capture value depends on innovations that are quickly and widely adopted. Yet, stakeholder concerns can establish important barriers to diffusion. We study the human capital aspect of this challenge and investigate whether innovative firms pay salary premiums to new hires with work experience from advocacy groups like Transparency International. We integrate strategic human capital with stakeholder theory and suggest that advocacy group experience creates signals for valuable human capital in terms of stakeholder knowledge and legitimacy transfers to innovative firms. Using matched data for 3,562 employees in Denmark, we find that new hires with advocacy group experience enjoy larger salary premiums at technologically leading firms, in occupations with direct stakeholder interaction, and for advocacy group top management. Managerial Summary: Innovation research is increasingly aware of the non-technological factors behind successful innovations. Users, regulators, or public opinion can be benevolent supporters or stingy opponents of innovations. Employees with an understanding of the needs and sensitivities of societal stakeholders should therefore be valuable to innovative firms. We find this to be the case when innovative firms hire employees from advocacy groups representing such stakeholders (e.g., Transparency International). Such employees receive higher salaries than an otherwise comparable reference group. These findings indicate that recruiting needs of innovative firms reward stakeholder experience, not merely technological expertise. They demonstrate how firms can create value in the pursuit of the public interest. Further, advocacy groups emerge as an important career stage allowing individuals to develop credible signals for stakeholder expertise.     

Engineering Occupational Choice, 1950–1965

This study has attempted to explain how the flow of engineers into the profession responded to market forces during the 1950–1965 period. The conventional explanation consists of two steps. The difference between the quantity supplied and the quantity demanded, at prevailing salaries, causes salary variation. Then, relative salary variations are supposed to cause supply variations. But in the case of the engineering labor market, while supplies vaned considerably, relative salaries did not. Consideration of the behavior of individuals has led us to believe that the second step of the conventional theory may be unnecessary. In a pervasively employment-conscious culture, variations in the availability of jobs seem to be a principal determinant af supply. This finding is actually quite consistent with economic theory which postulates supply as a function of expected earnings. It does suggest, however, that some consideration be given to changing the traditional emphasis from variations in earnings to variations in expectations.     

Whither Solidarity? Transitions in Swedish Public-Sector Pay Policy

As part of a drive for efficiency and decentralization in government operations, Sweden is implementing a new system of pay administration in the public sector that is marked by a clear movement away from centralized wage negotiation and fixed salary increases towards more flexible and individualized pay rates. Despite rhetoric about performance and efficiency, the changes appear to be focused mainly on expanding wage differentials among occupational groups and offering market premiums to recruit and retain valued employees. Although the new pay system has not been integrated into a general management approach, it offers considerable challenge to the norms and values of solidarity that have traditionally been held so strongly in Sweden.     

Marketing executives' perceptions of equitable salary increases

Employees' perceptions of fair and equitable salary increases is the subject of this article. Factors hypothesized to be the major determinants of the “perceived amount of pay that should be received” in Lawler's model of pay satisfaction are employed as predictor variables in a multiple regression equation context to explain the observed variation in executives' perceptions of fair and equitable salary increases. A national sample of industrial marketing executives were surveyed. A significant relationship was observed between employees perceptions of fair and equitable salary increases and a number of perceived personal job input and job demands related variables, current salary and wage history, and perceived non-monetary outcomes which are theorized in Lawler's model to be among the major determinants of the perceived amount of pay that should be received.     

Salary increases for the marketing executive

This article discusses how marketing executives view their pay raise. A study of 491 marketing executives examined their views on what is a meaningful salary increase and the reasons why their companies give pay raises.     

Executive Compensation and Ethnic Minority Status

We examine the compensation of ethnic minority executives in listed U.S. firms. The total pay of African American executives is 9 percent lower than that earned by Caucasians. This is due to lower base salary, lower bonus, and lower restricted stock grants. The lower bonus is due to a lower sensitivity to above‐average firm performance. African Americans also earn significantly less on the exercise of stock options, increasing the pay gap to 17 percent for total ex‐post pay. In contrast to African Americans, the compensation of Hispanic and Asian executives is comparable to Caucasians.     

Directors' Pay in the Privatized Utilities

This exploratory paper examines the relationship between the remuneration of the highest paid director and company performance in the privatized utilities. Four conclusions regarding the structure of top directors' pay emerge from the analysis. First, the salary plus bonus remuneration of top directors in the privatized utilities has increased by 12 per cent per annum since 1990. Second, average employee pay in these utilities has grown by about 3.1 per cent per annum over the same period. This suggests that top pay growth in the privatized utilities has outstripped that of the average worker since 1990. Third, the analysis cannot isolate a robust statistical relationship between directors' compensation and measures of pre-dated company performance. Finally, directors' share option dealings can sometimes considerably inflate their overall compensation.
Taken together, these findings implicitly question the current efficacy of remuneration committees for determining boardroom pay in the privatized utilities. One solution, which may enable shareholders more accurately to assess executive performance, is for complete disclosure of all components of directors' pay in the company accounts.     

Teachers’ Unions,Compensation, and Tenure

In this paper I show that school districts in which teachers negotiate via collective bargaining have greater returns to experience and grant tenure earlier than districts without collective bargaining. Districts that are unionized, either with or without legal collective bargaining protections, have higher returns to degrees and higher starting salaries than districts without a union. Unionization is not strongly correlated with the existence of output‐based pay for performance but is correlated with the use of output‐based measures in tenure decisions. Unionization is positively correlated with the number of junior teachers dismissed for poor performance but not strongly correlated with the number of senior teachers dismissed for poor performance.     

国有企业经营者薪酬激励效应的实证研究

薪酬机制是国有企业改革中的难点问题,如何发挥薪酬作为国有企业经营者提升企业业绩的激励作用更是建立科学、公平的国有企业薪酬机制的焦点问题。文章通过对2005年～2006年国有上市公司的实证分析得到企业规模、净资产收益率、所在区域、国家股比例和经营者任期是国有企业经营者薪酬水平的决定因素,而独立董事和监事会并没有发挥应有作用。对薪酬激励效应实证的结果表明,国有企业经营者年薪和持股比例的激励效应较强,高管团队的薪酬差距也有助于企业业绩提升。     

The gender pay gap in the ICT labour market: comparative experiences from the UK and New Zealand

This paper addresses the issues surrounding gender pay gaps focusing on the Information Communication Technology (ICT) sector of the labour market. Reporting on research conducted in the UK and New Zealand (NZ) we adopted a mixed method approach using comparable qualitative and quantitative research techniques to investigate pay issues amongst women working in ICT in the UK and NZ. Our findings reveal commonalities of experience and some interesting differences. Unlike with the UK sample, for example, in NZ women working in ICT do not believe that their pay reflects their workload, skills and their position within their own organisation. Our study found that non‐transparent pay and reward systems and salary secrets exacerbate inequality and discrimination in the UK and NZ. The paper concludes by offering some policy directions to encourage a narrowing of the gender pay gap and reflects on the benefits of doing cross‐national research.     

Gains from Specialization and Free Agency: The Story from the Gridiron

In the field of personnel economics, there are few opportunities to convincingly test for salary returns to specialization as against versatility. This paper performs such a test by modeling returns to performance measures associated with two different skills practiced by running backs in the National Football League. We find gains to both specialization and free agency with substantial predicted differences in returns for alternative skills. These differences vary across the salary distribution. In the top half of the salary distribution, model simulations show that specialists in either particular skill generate higher marginal returns than do versatile players.     

Incentive Redesign and Collaboration in Organizations: Evidence from a Natural Experiment

Research summary : Separating the individual from the social effects of incentives has been challenging because of the possibility of synergies in team production. We observe a unique natural experiment in a South Korean e‐commerce company in which a switch from pay‐for‐performance to fixed (but different) salaries took place in a staggered and effectively random manner across employees. In this case, social and individual effects perspectives make opposing predictions, enabling a critical test. We find evidence consistent with social effects of incentives, particularly as predicted by goal framing theory. The results have implications for the design of incentives to foster collaboration, organizational learning, and organizational performance. Managerial summary : Managers often neglect the deeper hypothesis behind pay‐for‐performance schemes—that people primarily care about how much they are individually paid. An opposing school of thought contends that incentives have social effects too—that individuals care about not only what they receive but also what their peers receive. It is difficult to say whether individual or social effects would be more salient in a context, without a proper experiment with randomization. We exploit a rare opportunity provided by a company that changed its incentive system in a random order, thus unintentionally creating a natural experiment. The results strongly validate the existence of social effects of incentives, but also make the general case for the opportunity to learn from experimenting with organization design in a systematic manner. Copyright © 2017 John Wiley & Sons, Ltd.     

UK Executive Bonuses and Transparency — A Research Note

High levels of executive pay in the USA and the UK have attracted journalistic and academic criticism to the effect that they constitute rent extraction by self‐interested executives rather than rewards for raising shareholder returns. The focus of most criticism has been on salary, severance payments and various long‐term incentives (particularly share options). However, executive bonuses have attracted little attention and have been only lightly regulated. This raises important questions. Has lighter regulation been associated with significant levels of rent extraction through bonuses, that is, a weak relation between bonus pay and shareholder returns? Have more transparent performance conditions attached to bonuses strengthened the relation, making rent extraction more difficult, or have they acted as camouflage for rent extraction, associated with higher bonus pay but lower pay‐performance responsiveness? Are measures of CEO power associated with larger bonuses? This empirical note provides the first, preliminary answers to these questions.