ScholarWorks@숙명여자대학교

초록

This study explores gender differences in performance-related pay structures in the context of CEO power and rent-extraction mechanisms. The literature on the CEO power approach suggests that CEO pay increases when firm performance increases but does not decrease to the same extent when firm performance decreases. In other words, CEO pay exhibits downward pay rigidities. We examine whether these downward pay rigidities differ by gender under managerial settings. First, we revisit and confirm the incidence of pay rigidities. Then, motivated by documented gender differences in attitudinal and behavioral traits, we hypothesize that pay rigidities are greater for male CEOs than for female CEOs. We measure downward pay rigidities directly by developing a regime-switching model that distinguishes between rigid and flexible pay-performance sensitivity and find evidence supporting our hypothesis. Our result implies that female CEOs are less likely to seek opportunities to extract rents than are male CEOs.

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