Looking for respect? How prior TMT social comparisons affect executives' new TMT engagements

• Date: 01 December 2020
• DOI: http://doi.org/10.1002/smj.3186
• Author: Jason W. Ridge,Federico Aime,Aaron D. Hill
• Published date: 01 December 2020

RESEARCH ARTICLE

Looking for respect? How prior TMT social

comparisons affect executives' new TMT

engagements

Federico Aime

1

| Aaron D. Hill

2

| Jason W. Ridge

3

1

Spears School of Business, Oklahoma

State University, Stillwater,

Oklahoma, USA

2

Warrington College of Business,

University of Florida, Gainesville,

Florida, USA

3

University of Arkansas, Sam Walton

College of Business, Fayetteville,

Arkansas, USA

Correspondence

Federico Aime, Spears School of

Business, Oklahoma State University,

469 Business Building, Stillwater, OK

74078.

Email: aime@okstate.edu

Abstract

Research summary: We extend social comparison

theory and research in top management teams by

showing that negative social comparisons in TMTs

have implications for subsequent employment deci-

sions after executive turnover. In a sample of 1,001

executive employment moves to new TMTs, our results

show that executives with lower relative pay in the

firms they exit join firms that improve their social com-

parison situation within the new TMT when compared

to their previous experience—while not necessarily

providing larger improvements in pay. These findings

complement social comparison views on executive

turnover by showing that executives' new employment

decisions are guided by the correction of negative social

comparisons in their new firms.

Managerial summary: We show that executives who

experience negative social comparisons in pay in a

TMT because of their lower relative rank in its pay

structure select new employment in firms with more

narrow pay differences within their TMT. In addition,

we show that such executives improve their relative

pay in comparison to others in the TMT in their new

TMTs without necessarily experiencing abnormal

improvements in pay. These findings show that social

comparisons in pay between TMT members may not

only drive executive turnover, as previously shown in

the literature, but also directs executive decisions about

Received: 3 August 2015 Revised: 16 April 2020 Accepted: 17 April 2020 Published on: 15 July 2020

DOI: 10.1002/smj.3186

Strat Mgmt J. 2020;41:2185–2199. wileyonlinelibrary.com/journal/smj © 2020 John Wiley & Sons, Ltd. 2185