<scp>CEO</scp> political ideologies and pay egalitarianism within top management teams

Chin, M. K.; Semadeni, Matthew

doi:10.1002/smj.2608

Cited by 111 publications

(73 citation statements)

References 86 publications

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“…Studies of corporate leadership suggest that the ideological proclivities of executives and corporate board members shape organizational priorities in ways that are highly consistent with theory and research in political psychology. For example, studies of CEO's and other corporate actors revealed that-in good economic times as well as bad-corporations led by liberals were more likely than those led by conservatives to promote environmental sustainability-as well as human rights, income equality, gender parity, diversity initiatives, product quality, and positive employee and community relations (Briscoe & Joshi, in press;Chin, Hambrick, & Treviño, 2013;Chin & Semadeni, 2017;Gupta, Briscoe, & Hambrick, 2017). Because conservative managers are more system-justifying than liberal managers, they may experience weaker emotional reactions to ethical transgressions and seem to be less interested in corporate social responsibility overall (Hafenbrädl & Waeger, 2016; see also Tan, Liu, Huang, & Zheng, 2016).…”

Section: Implications For Persuasion Framing and Advertisingmentioning

confidence: 99%

The marketplace of ideology: “Elective affinities” in political psychology and their implications for consumer behavior

2017

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An abundance of research in political psychology demonstrates that leftists and rightists (or liberals and conservatives) diverge from one another in terms of: (a) personality characteristics; (b) cognitive processing styles; (c) motivational interests and concerns; (d) the prioritization of personal values; and (e) neurological structures and physiological functions. In this article, I summarize these findings and discuss some of their implications for persuasion, framing, and advertising; consumer choice, judgment, decision‐making, and behavior; and customer satisfaction/dissatisfaction and politically motivated boycotts. I conclude that the theory and practice of consumer psychology will be enriched by taking into account ideological asymmetries and the ways in which human behavior both reflects and gives rise to left–right divergence in political orientation—not only in terms of beliefs, opinions, and values but also in terms of underlying psychological processes.

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Section: Implications For Persuasion Framing and Advertisingmentioning

confidence: 99%

The marketplace of ideology: “Elective affinities” in political psychology and their implications for consumer behavior

2017

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“…Gupta and Wowak (2017, p. 8) describe this mechanism, noting, "their more pronounced beliefs in external causes of performance should lead liberal boards to view CEOs as having a lower potential contribution." Such ideologically informed reluctance to make internal attributions will systematically lower liberal boards' desire to grant outsized rewards or punishments to their CEOs (Chin & Semadeni, 2017;Gupta et al, 2018). These arguments suggest that board political ideology moderates our main moderating hypothesis.…”

Section: Moderating Role Of Board Political Ideologymentioning

confidence: 74%

“…This occurs because, as Tetlock et al (, p. 24) observe, “liberals are likelier to see the effort‐success links as easily severed by chance and exogenous shocks.” Even when strategic investments co‐occur with high performance, liberal‐leaning boards may show reluctance to accept: (a) that the strategic investments are the primary drivers of firm performance; and (b) that the CEO single‐handedly arrived at the decision to make those strategic investments. Gupta and Wowak (, p. 8) describe this mechanism, noting, “their more pronounced beliefs in external causes of performance should lead liberal boards to view CEOs as having a lower potential contribution.” Such ideologically informed reluctance to make internal attributions will systematically lower liberal boards' desire to grant outsized rewards or punishments to their CEOs (Chin & Semadeni, ; Gupta et al, ). These arguments suggest that board political ideology moderates our main moderating hypothesis.Hypothesis For conservative‐leaning boards, corporate strategic investment strongly moderates the CEO pay‐for‐performance relationship.…”

Section: Hypothesesmentioning

confidence: 99%

“…When conservative boards evaluate CEOs that have made considerable strategic investments, it gives them an obvious reason to make internal attributions (Gupta, Briscoe, & Hambrick, 2018). Conservative boards are likely to tie strategic investments to firm performance because doing so fits their ideological convictions regarding individuals being responsible for outcomes (Chin & Semadeni, 2017;Christensen, Dhaliwal, Boivie, & Graffin, 2015). This may occur because conservative directors strongly believe that CEOs are personally responsible for successes and failures, so CEOs' big bets on strategic investments further reinforce their favored themes of personal accountability.…”

Section: Moderating Role Of Board Political Ideologymentioning

confidence: 99%

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Placing their bets: The influence of strategic investment on CEO pay‐for‐performance

Shi

Connelly

Mackey

et al. 2019

Strategic Management Journal

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Research Summary A number of studies examine the extent to which boards compensate CEOs for their firm's performance (i.e., pay‐for‐performance), but these studies typically do not incorporate what CEOs actually do to bring about those performance outcomes. We suggest that directors will make stronger internal attributions about firm performance when the CEO engages in high levels of corporate strategic investment. CEOs that invest in firm growth essentially “place their bets,” so the pay‐for‐performance relationship is stronger for them than it is for CEOs who do not invest as much in firm growth. We also theorize and find that directors make internal attributions about firm performance more for prestigious, but not less prestigious, CEOs and more when the directors collectively exhibit conservative, but not liberal, political ideologies. Managerial Summary Shareholders and other stakeholders often demand that CEOs should be paid for performance. In other words, CEOs should be paid well when the company is performing well and paid less when the company is not performing well. We add an additional dimension: boards might also consider what CEOs actually do to bring about performance outcomes. Our findings suggest that when CEOs make heavy corporate investments, they essentially “place their bets.” In this scenario, boards attribute performance to the CEO so that CEO compensation rises and falls with company performance. When CEOs make fewer corporate investments, their compensation is not as strongly associated with company performance. This primary relationship is particularly true when CEOs have high social recognition or when the directors are collectively conservative.

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“…Using political psychology and upper echelon perspectives, Gupta and Wowak () found that politically conservative compensation committees, in which their members have donated more often, over a longer period of time and in greater amounts to the Republican party in the US, were positively associated with total CEO pay and greater rewards for strong financial performance. On the other hand, Chin and Semadeni () found that politically liberal CEOs and compensation committees, who prioritize both egalitarianism and equality, are associated with greater pay equality among non‐CEO executives. These two studies are examples of how established management theory can be integrated with social constructs to offer new and relevant insights into corporate governance.…”

Section: Review Of the Board Committee Literaturementioning

confidence: 99%

Board Committees in Corporate Governance: A Cross‐Disciplinary Review and Agenda for the Future

Kolev

Wangrow

Barker

et al. 2019

J Management Studies

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The importance of board committees – specialized subgroups that exist to perform many of the board's most critical functions, such as setting executive compensation, identifying potential board members, and overseeing financial reporting – has grown over time due to increased legal requirements and greater complexity of the environment in which firms operate. This has resulted in a large body of work examining board committees across the accounting, finance, and management disciplines. However, this research has developed rather independently within each discipline, preventing scholars and practitioners from developing a comprehensive understanding of board committees. To address this issue, we conduct a comprehensive review of the literature that: 1) summarizes and synthesizes antecedents and outcomes associated with board committees in publicly‐traded firms in English common law countries; and 2) offers a critical analysis of existing research, providing recommendations for advancements and new directions in board committee research.

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CEO political ideologies and pay egalitarianism within top management teams

Cited by 111 publications

References 86 publications

The marketplace of ideology: “Elective affinities” in political psychology and their implications for consumer behavior

The marketplace of ideology: “Elective affinities” in political psychology and their implications for consumer behavior

Placing their bets: The influence of strategic investment on CEO pay‐for‐performance

Board Committees in Corporate Governance: A Cross‐Disciplinary Review and Agenda for the Future

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