Gregory-Smith, I. orcid.org/0000-0001-9383-6621 and Wright, P. (2019) Winners and losers of corporate tournaments. Oxford Economic Papers, 71 (1). pp. 250-268. ISSN 0030-7653
Abstract
In a corporate tournament, executive directors are motivated by the prospect of promotion to CEO, with winners receiving large increases in remuneration. Tournament losers by contrast face a discrete loss in their valuation of their position, since the prospect of them becoming CEO is substantially reduced. We argue that this offers an opportunity to test the predictions of tournament theory by observing the quit behaviour and the wages of the losing directors. We find a sharp increase in the likelihood that directors leave the firm when the tournament ends. The directors who remain receive an increase in their remuneration following a rival’s promotion.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © Oxford University Press 2018. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted reuse, distribution, and reproduction in any medium, provided the original work is properly cited. |
Keywords: | corporate succession; executive remuneration; tournament theory |
Dates: |
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Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Department of Economics (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 15 May 2018 14:41 |
Last Modified: | 02 Dec 2020 09:20 |
Status: | Published |
Publisher: | Oxford University Press (OUP) |
Refereed: | Yes |
Identification Number: | 10.1093/oep/gpy033 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:130807 |