Корпоративные Конфликты И Политика Фирм В Области Занятости И Заработной Платы[Corporate Governance Conflicts and Employment and Wage Policies of Companies]

This article studies the link between corporate governance conflicts on the one hand, and employment and wage policies of companies on the other. We use data on publicly traded Russian companies with dual class stock (common and preferred shares), which allows us to use the concept of voting premium for measurement of corporate conflicts and private benefits of control. Our analysis suggests a link between the severity of corporate governance problems between shareholders and managers and the company’s wage policies. In particular, managers who try to consume private benefits and expropriate shareholders, have to resort to more generous policies regarding workers’ wages. Importantly, this link is apparent only in companies with relatively dispersed ownership, in which managers have considerable discretion and are not constrained by obligations before large shareholders. In contrast, the link between extraction of private benefits of control and wage policies is not visible in companies with a majority shareholder.