This article adds to the empirical literature on tournament theory as a theory of executive compensation. The author tests several propositions of tournament models on a rich data set containing information about 2,600 executives in 210 Danish firms during a four-year period. He asks if pay differentials between job levels are consistent with relative compensation; if pay dispersion between levels is higher in noisy environments; if the dispersion is affected by the number of tournament participants; if average pay is lower in firms with more compressed pay structures; and if wider pay dispersion enhances firm performance. Most of the predictions gain support in the data. Copyright 1999 by University of Chicago Press.
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Volume (Year): 17 (1999) Issue (Month): 2 (April) Pages: 262-80 Download reference. The following formats are available: HTML
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Handle: RePEc:ucp:jlabec:v:17:y:1999:i:2:p:262-80
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