Asymmetric reference points and the growth of executive remuneration

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Title Asymmetric reference points and the growth of executive remuneration
Author Peetz, David Robert
Publication Title AIRAANZ: Work in Progress: Crises, Choices and Continuity. Proceedings of the 24th Conference
Editor Alison Barnes, Michael Lyons
Year Published 2010
Place of publication Australia
Publisher University of Western Sydney
Abstract Various explanations have been put forward for the recent divergence in growth rates of CEO pay and average earnings, but those which most clearly match the evidence concern power and the institutions of remuneration setting. Executive pay is characterised by 'dual asymmetric pattern bargaining', whereby firms seek to benchmark their CEO pay to higher-paying firms, and grant CEOs, with whom corporate decision makers share a social milieu, increasing benefits which also confer status benefits on the firm – in sharp contrast to the distributional pay negotiations which occur with workers. Executive remuneration rises disproportionately during boom periods, but fails to symmetrically fall during poor times. Thus 'everybody knows' that CEOs are overpaid, but firms are unwilling to do anything about it, because to do so would damage internal class relations and firm status. The different methods of pay setting for workers and CEOs reflect core differences in class power and changes in that balance of power during a period of neoliberalism.
Peer Reviewed Yes
Published Yes
Publisher URI http://www.alloccasionsgroup.com/AIRAANZ2010
Alternative URI http://airaanzweb.weebly.com/2010-conference-main.html
Copyright Statement Copyright 2010 Association of Industrial Relations Academics Australia & New Zealand (AIRAANZ). The attached file is posted here in accordance with the copyright policy of the publisher, for your personal use only. No further distribution permitted. Use hypertext link for access to publisher's website.
ISBN 9780980608526
Conference name AIRAANZ: Work in Progress: Crises, Choices and Continuity
Location Sydney
Date From 2010-02-03
Date To 2010-02-05
URI http://hdl.handle.net/10072/35965
Date Accessioned 2011-01-21
Date Available 2011-02-03T07:00:26Z
Language en_AU
Research Centre Centre for Work, Organisation and Wellbeing
Faculty Griffith Business School
Subject Industrial Relations
Publication Type Conference Publications (Full Written Paper - Refereed)
Publication Type Code e1

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