THE MANAGERIAL POWER IMPACT ON COMPENSATION – SOME FURTHER EVIDENCE

Download This Article

Tor Eriksson ORCID logo

https://doi.org/10.22495/cocv2i3p9

Abstract

The aim of this paper is to test the managerial power hypothesis more rigorously than in previous studies by: testing it against the compensating wage differentials explanation, using both cross-sectional and longitudinal data, and adopting two alternative measures of managerial power; a frequently used indirect one, and a more direct power indicator. The results of analysis show that despite introducing individual characteristics, when using two or three alternative measures of managerial power and when estimating the managerial compensation model on cross-sectional as well as longitudinal data (the later allowing me to cater for unobserved heterogeneity), the power variables continue to obtain positive and statistically significant co-efficient estimates.

Keywords: Managerial Power, Managerial Compensation

How to cite this paper: Eriksson, T. (2005). The managerial power impact on compensation – some further evidence. Corporate Ownership & Control, 2(3), 87-93. https://doi.org/10.22495/cocv2i3p9