Working in corporate America: Dynamics of pay at large corporations, 1992--2005

This dissertation explores the structure of compensation for workers and executive managers in large American corporations during the turbulent era of 1992--2005, when corporate America underwent a vast transformation in business strategies, organizational structures, and corporate governance. Structures and processes in employer organizations constitute the key mechanism where compensation is determined and job rewards are distributed within the firms. Such an organizational perspective provides the theoretical basis to explore the processes in which corporate governance, management characteristics, and power relations shape the structure of pay. Using quantitative data from large American corporations from 1992 to 2005, this study examines how organization-level factors have affected workers' pay, executive compensation, and pay disparities between workers and executive managers at these firms.;The empirical analysis demonstrates that organizational characteristics of the firms---such as corporate governance, dominant conception of control, and relative power among managers, directors, and shareholders---have significant effects on the structure of compensation for workers and top managers in corporate America. Firms with greater profits do not necessarily pay workers more, but workers are paid less in firms managed by CEOs with longer tenure, with functional backgrounds in finance, or with appointment from outside the organization. In determining workers' pay and its relationship with corporate profits, management characteristics matter more than ownership structure of the firms. On the other hand, CEO pay is strongly tied to CEO pay at peer firms, often through compensation benchmarking. Such peer comparison becomes particularly more active in firms in which the CEO is more powerful over the board and ownership by institutional investors is less concentrated. Finally, the analysis indicates that CEOs' power and functional backgrounds affect pay disparities between executive managers and average workers. Pay disparities are greater in firms managed by CEOs with greater organizational power and with finance backgrounds. These results support the view that social processes at the level of organizations significantly determine how corporate resources are distributed in the form of compensation among different groups of stakeholders.