Agency-theory and internal-labor-market explanations of bonus payments: Empirical evidence from Spanish firms

Pedro Ortín-Ángel, Vicente Salas-Fumás

    Research output: Contribution to journalArticleResearchpeer-review

    20 Citations (Scopus)

    Abstract

    This paper combines agency theory and internal-labor-market theories to explain the determinants of bonus payments among a large sample of top and middle managers from Spanish firms. A distinction is made between the decision whether to pay bonus or not and the size of the bonus. The empirical evidence confirms that the two decisions are determined by different factors. The results of the analysis show a trade-off between short-term and long-term incentives (bonuses and promotion opportunities) as well as differences in the pattern of compensation policies across economic sectors and functional areas inside the firm.
    Original languageEnglish
    Pages (from-to)573-613
    JournalJournal of Economics and Management Strategy
    Volume7
    Issue number4
    DOIs
    Publication statusPublished - 1 Jan 1998

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