EXECUTIVE COMPENSATION, ORGANIZATIONAL CULTURE AND THE GLASS CEILING

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Abstract

This study examines the impact of organizational culture on executive compensation systems. Organizational culture is found to have a strong impact on the relationship between CEO equity compensation and organizational effectiveness. Compensation patterns found in traditional organizations are interpreted to reflect a Managerial Power Theory of executive compensation. In contrast, in positive organizations, the exercise of managerial power appears to be constrained by the internal values of that organization and the need for the leader to maintain his or her authenticity. Female executives who have penetrated the glass ceiling in both traditional and positive organizations are found to contribute to a culture in which executive compensation reflects an Optimal Contract approach to principle-agent relationships for CEOs and shareholders.

Keywords: Organizational Culture, Executive Compensation, Managerial Power Theory

How to cite this paper: Dewally, M., Flaherty, S., & Singer, D. (2014). Executive compensation, organizational culture and the glass ceiling. Corporate Ownership & Control, 11(2-1), 239-247. https://doi.org/10.22495/cocv11i2c1p7