IDEAS home Printed from https://ideas.repec.org/a/sae/ausman/v33y2008i1p1-30.html
   My bibliography  Save this article

The Stairway to the Top: The Remuneration of Academic Executives

Author

Listed:
  • Kenneth W. Clements

    (UWA Business School, The University of Western Australia.)

  • H. Y. Izan

    (UWA Business School, The University of Western Australia.)

Abstract

Australian universities have in recent times been undergoing a substantial transformation in the way in which they are managed. They have moved away from the (British-based) traditional collegiate model to one in which professional managers play a centre-stage role. This paper investigates an important element of the managerialism at Australian universities, the market for what we call ‘academic executives' (AEs). We analyse the remuneration of the top AEs at Australian universities over the past six years and show that institutional size is a dominant driving factor of remuneration, as has been found with compensation of CEOs in the private sector. We also find the pay-size elasticity to be about 0.25 and is the same for both the university and private sectors; and remarkably, this value has also been found in previous studies on executive remuneration for the US and the UK. The remuneration schedule for the university sector is about half as steep as that for the private sector, suggesting that it is a much harder climb to the top of the corporate ladder. We analyse the structure of remuneration among AEs and the Group of Eight universities are found to have a pay parity structure that is closest to (hat for the private sector.

Suggested Citation

  • Kenneth W. Clements & H. Y. Izan, 2008. "The Stairway to the Top: The Remuneration of Academic Executives," Australian Journal of Management, Australian School of Business, vol. 33(1), pages 1-30, June.
    • Handle: RePEc:sae:ausman:v:33:y:2008:i:1:p:1-30
    DOI: 10.1177/031289620803300102
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/031289620803300102
    Download Restriction: no
    File URL: https://libkey.io/10.1177/031289620803300102?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-864, October.
    2. Rosen, S., 1990. "Contracts and Market for Executives," University of Chicago - Economics Research Center 90-12, Chicago - Economics Research Center.
    3. repec:bla:jfinan:v:43:y:1988:i:3:p:593-616 is not listed on IDEAS
    4. Eriksson, Tor, 1999. "Executive Compensation and Tournament Theory: Empirical Tests on Danish Data," Journal of Labor Economics, University of Chicago Press, vol. 17(2), pages 262-280, April.
    5. Martin J. Conyon & Simon I. Peck & Graham V. Sadler, 2001. "Corporate tournaments and executive compensation: Evidence from the U.K," Strategic Management Journal, Wiley Blackwell, vol. 22(8), pages 805-815, August.
    6. Baker, G.P. & Jensen, M.C. & Murphy, K.J., 1988. "Compensation And Incentives: Practice Vs. Theory," Papers 88-05, Rochester, Business - Managerial Economics Research Center.
    7. Murphy, Kevin J., 1999. "Executive compensation," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 38, pages 2485-2563, Elsevier.
    8. Coupé, Tom & Smeets, Valerie & Warzynski, Frederic, 2003. "Incentives in Economic Departments: Testing Tournaments?," Working Papers 03-25, University of Aarhus, Aarhus School of Business, Department of Economics.
    9. Peter F. Kostiuk, 1990. "Firm Size and Executive Compensation," Journal of Human Resources, University of Wisconsin Press, vol. 25(1), pages 90-105.
    10. Kenneth W. Clements & H. Y. Izan, 2008. "The Stairway to the Top: The Remuneration of Academic Executives," Australian Journal of Management, Australian School of Business, vol. 33(1), pages 1-30, June.
    11. Ehrenberg, Ronald G & Bognanno, Michael L, 1990. "Do Tournaments Have Incentive Effects?," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1307-1324, December.
    12. Sherwin Rosen, 1982. "Authority, Control, and the Distribution of Earnings," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 311-323, Autumn.
    13. Ronald G. Ehrenberg & Michael L. Bognanno, 1990. "The Incentive Effects of Tournaments Revisited: Evidence from the European PGA Tour," ILR Review, Cornell University, ILR School, vol. 43(3), pages 74, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kenneth W. Clements & H. Y. Izan, 2008. "The Stairway to the Top: The Remuneration of Academic Executives," Australian Journal of Management, Australian School of Business, vol. 33(1), pages 1-30, June.
    2. Martin Bugeja & Brett Govendir & Zoltan Matolcsy & Greg Pazmandy, 2021. "Is there an association between Vice‐Chancellors’ compensation and external performance measures?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(1), pages 689-726, March.
    3. Bachan, Ray & Bryson, Alex, 2022. "The Gender Wage Gap Among University Vice Chancellors in the UK," Labour Economics, Elsevier, vol. 78(C).
    4. Jiawei Si, 2021. "Executive Remuneration In The Public Sector: How Different To The Private Sector?," Economics Discussion / Working Papers 21-09, The University of Western Australia, Department of Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:eee:labchp:v:3:y:1999:i:pb:p:2373-2437 is not listed on IDEAS
    2. Waldman, Michael, 2013. "Classic promotion tournaments versus market-based tournaments," International Journal of Industrial Organization, Elsevier, vol. 31(3), pages 198-210.
    3. Xavier Gabaix & Augustin Landier, 2008. "Why has CEO Pay Increased So Much?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(1), pages 49-100.
    4. Sun, Sophia Li & Habib, Ahsan, 2020. "Determinants and consequences of tournament incentives: A survey of the literature in accounting and finance," Research in International Business and Finance, Elsevier, vol. 54(C).
    5. Bernd Frick, 2003. "Contest Theory and Sport," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 19(4), pages 512-529, Winter.
    6. DeVaro, Jed, 2011. "Using "opposing responses" and relative performance to distinguish empirically among alternative models of promotions," MPRA Paper 35175, University Library of Munich, Germany.
    7. Bingley, P. & Eriksson, T, 2001. "Pay Spread and Skewness. Employee Effort and Firm Productivity," Papers 01-2, Aarhus School of Business - Department of Economics.
    8. Talavera, Oleksandr & Yin, Shuxing & Zhang, Mao, 2021. "Tournament incentives, age diversity and firm performance," Journal of Empirical Finance, Elsevier, vol. 61(C), pages 139-162.
    9. Bai, Peiwen & Cheng, Wenli, 2020. "Relative earnings and firm performance: Evidence from publicly-listed firms in China, 2005–2012," International Review of Economics & Finance, Elsevier, vol. 66(C), pages 279-290.
    10. Tor Eriksson & Sabrina Teyssier & Marie‐Claire Villeval, 2009. "Self‐Selection And The Efficiency Of Tournaments," Economic Inquiry, Western Economic Association International, vol. 47(3), pages 530-548, July.
    11. Michael Waldman, 2012. "Theory and Evidence in Internal LaborMarkets [The Handbook of Organizational Economics]," Introductory Chapters,, Princeton University Press.
    12. Duran, Mihael, 2011. "Nachträgliche Reduktion von Vorstandsbezügen: Eine ökonomische Analyse der Herabsetzungsmöglichkeit von Vorstandsbezügen nach dem VorstAG [Ex post Reduction of Executive Compensation: An economic r," MPRA Paper 33815, University Library of Munich, Germany.
    13. Carr, Michael D., 2011. "Work hours and wage inequality: Evidence from the 2004 WERS," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(4), pages 417-427, August.
    14. Sun, Sophia Li & Habib, Ahsan & Huang, Hedy Jiaying, 2019. "Tournament incentives and stock price crash risk: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 54(C), pages 93-117.
    15. Matthias Kräkel & Dirk Sliwka, 2004. "Risk Taking in Asymmetric Tournaments," German Economic Review, Verein für Socialpolitik, vol. 5(1), pages 103-116, February.
    16. Baik, Bok & Evans, John H. & Kim, Kyonghee & Yanadori, Yoshio, 2016. "White collar incentives," Accounting, Organizations and Society, Elsevier, vol. 53(C), pages 34-49.
    17. Edwin Leuven & Hessel Oosterbeek & Joep Sonnemans & Bas van der Klaauw, 2011. "Incentives versus Sorting in Tournaments: Evidence from a Field Experiment," Journal of Labor Economics, University of Chicago Press, vol. 29(3), pages 637-658.
    18. Chirok Han & Changhui Kang & Sam-Ho Lee, 2016. "Measuring Effort Incentives In A Tournament With Many Participants: Theory And Application," Economic Inquiry, Western Economic Association International, vol. 54(2), pages 1240-1250, April.
    19. Jennifer Brown, 2011. "Quitters Never Win: The (Adverse) Incentive Effects of Competing with Superstars," Journal of Political Economy, University of Chicago Press, vol. 119(5), pages 982-1013.
    20. Steffen Altmann & Armin Falk & Matthias Wibral, 2012. "Promotions and Incentives: The Case of Multistage Elimination Tournaments," Journal of Labor Economics, University of Chicago Press, vol. 30(1), pages 149-174.
    21. Jye-Shyan Wang & Chih-Fu Cheng & Wen-Jhan Jane, 2014. "Buying success or redistributing payment: bidirectional causality in Korean Professional Baseball League," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 4(2), pages 247-260, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:ausman:v:33:y:2008:i:1:p:1-30. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://www.agsm.edu.au .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.