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Do heavily-unionized companies compensate their CEOs less in periods of financial distress? Evidence from Canadian companies during the financial crisis.

Boodoo, Muhammad Umar (2018) Do heavily-unionized companies compensate their CEOs less in periods of financial distress? Evidence from Canadian companies during the financial crisis. Industrial and Labor Relations Review, 71 (2). pp. 306-328. ISSN 0019-7939

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Identification Number: 10.1177/0019793917719885

Abstract

This paper studies the strategic interaction between employee stakeholders, in particular labor unions, and top management, and evaluates the effect of the two parties’ inherent competitive rent-seeking behavior on CEO pay. Using a panel of firms listed on the S&P/TSX composite index, this paper finds that CEO compensation withstood the financial crisis despite lower and even negative corporate performance. Further, heavily-unionized companies were associated with higher CEO pay in terms of non-equity elements such as salary and pension allocations. The presence of unions had no observed effect in reducing bonuses, stock options, and restricted stock units. These findings have implications for the debate on income inequality, and the power of unions to bring about change.

Item Type: Article
Official URL: http://journals.sagepub.com/home/ilr
Additional Information: © 2017 The Author
Divisions: Management
Subjects: H Social Sciences > HB Economic Theory
Sets: Departments > Management
Date Deposited: 01 Mar 2017 13:06
Last Modified: 20 Feb 2019 06:37
URI: http://eprints.lse.ac.uk/id/eprint/69601

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