Bonus Payments, Hierarchy Levels, and Tenure: Theoretical Considerations and Empirical Evidence
Schmalenbach Business Review, Vol. 64, April 2012, pp. 101-124
24 Pages Posted: 14 Apr 2012
There are 2 versions of this paper
Bonus Payments, Hierarchy Levels, and Tenure: Theoretical Considerations and Empirical Evidence
Bonus Payments, Hierarchy Levels and Tenure: Theoretical Considerations and Empirical Evidence
Date Written: April 1, 2012
Abstract
We investigate two theoretical approaches that focus on bonuses as part of a firm’s long-term wage policy. The first approach argues that explicit bonuses serve as substitutes for implicit career concerns. The second claims that bonuses act as complements to an executive’s internal career. Our data show that throughout the whole chemical industry sector, bonus payments are mostly prevalent among the most senior executives and for management jobs rather than for jobs in research and development. The findings indicate that the two theoretical views are not mutually exclusive, but are both relevant in practice.
Keywords: Bonuses, Career Concerns, Hierarchy Levels, Internal Careers, Tenure
JEL Classification: J31, J33, M51, M52
Suggested Citation: Suggested Citation
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