Abstract
Compensation studies traditionally draw from behavioral agency model to explore how CEO pay influences risk taking, yet this literature has generated mixed results. Integrating behavioral agency model and social comparison theory, we develop a more complete theoretical model that shed light on the equivocal findings. We introduce the concept of social pay reference point that explains risk taking in response to the underlying behavioral and social-psychological mechanisms through which CEOs compare and frame their pay relative to social peers' pay. In addition, we establish theoretical boundary conditions of the hypothesized baseline effects by considering the moderating effects of environmental munificence and dynamism. We test our hypotheses on 545 manufacturing firms across 2878 firm-year observations spanning time period from 1994 to 2006. Our hypotheses receive considerable empirical support.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
