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Czech Managerial Compensations: Why Does It Pay Off to Climb the Corporate Ladder?

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  • Teodora Paligorova

Abstract

This paper uses matched employer-employee data for the Czech Republic to study the structure of managerial compensation. The evidence supports two key predictions from tournament theory. First, the managerial pay differential between organizational levels is non-decreasing as one goes up the corporate ladder. I document a particularly large increment of the pay differential at the top of a firm's hierarchy. Second, the winner's prize in the tournament increases with the number of competitors for the position of the top managers.

Suggested Citation

  • Teodora Paligorova, 2005. "Czech Managerial Compensations: Why Does It Pay Off to Climb the Corporate Ladder?," CERGE-EI Working Papers wp262, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    • Handle: RePEc:cer:papers:wp262
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    References listed on IDEAS

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    More about this item

    Keywords

    Czech Republic; tournament models; matched employer-employee data.;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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