The determinants and effects of CEO – employee pay ratios q

  title={The determinants and effects of CEO – employee pay ratios q},
  author={Olubunmi Faleye and E. E. Reis and Anand Venkateswaran},
We study the determinants and effects of the relative compensation of top executives and lower-level employees. First, we show that CEO–employee pay ratios depend on the balance of power between the CEO (relative to the board) and ordinary employees (relative to management). Second, our results suggest that employees do not perceive higher pay ratios as an inequitable outcome to be redressed via costly behaviors that lower productivity. We do not find a negative relation between relative pay… CONTINUE READING

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