Union presence and executive compensation: An exploratory study Academic Article uri icon

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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.

publication date

  • December 2002