Abstract
AbstractIn this article, I argue that small, but lucrative high-status subgroups lead to an upward ratcheting of compensation levels through the diffusion of norms. Combining relational theories of inequalities and theories of social norms I show how subfield status hierarchies play out at the firm level. I examine the impact of excess compensation in alternative finance (private equity, hedge and venture funds) on traditional finance. Based on multilevel regression on 2159 US and UK executives and longitudinal analyses on 261 firms from 2010 to 2017, I find first, that managers with an alternative finance background receive a pay premium in traditional finance (19.7%). Secondly, within the UK, compensation levels in organizations that witnessed the arrival of sectoral migrants rise above the expected increase. The findings suggest that understanding income dynamics requires detailed scrutiny of high-status subgroups, especially if activities are structured as opaque and lightly regulated organizational forms.
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.
