Union presence and executive compensation: An exploratory study
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abstract
While executive compensation has historically attracted considerable
attention and controversy, this issue is becoming increasingly more
contentious as organizations attempt to cut labor costs through
re-engineering and downsizing. Unions, governments, and workers are
becoming critical of seemingly excessive executive compensation while
employees are asked to make concessions. In fact, many labor organizations
are specifically targeting executive compensation for criticisms: Witness
their web sites tracking executive pay and numerous press releases and
public statements. However, do unions, through their presence in a firm,
affect executive compensation? While there is considerable research on the
determinants and correlates of executive compensation, the literature is
silent on the role of unions. We investigate the distinctive effects of
union presence with data on a sample of Canadian-based metal-mining firms.
The differences between union and nonunion firms, as well as the unique
effects of union presence, are analyzed and future research suggested.
