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Unraveling the knot: Organized labor and the complexity of CEO compensation

Stephen P. Ferris et al.

Journal of Financial Research2026https://doi.org/10.1111/jfir.70043article
AJG 3ABDC A
Weight
0.50

Abstract

This study examines how labor unions influence the complexity of CEO compensation contracts. We find unionization rates positively correlate with complexity, especially in the performance‐based components. This relationship reflects firms balancing the need to recruit talented CEOs with higher contingent pay against union preferences for less discretionary salary. We discover, however, that greater complexity results in higher future CEO incentive compensation, thus widening the gap between CEO and employee pay. Further, elevated complexity increases the likelihood of a work stoppage. Our results emphasize the challenges of introducing complexity into executive compensation design in unionized environments.

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https://doi.org/https://doi.org/10.1111/jfir.70043

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@article{stephen2026,
  title        = {{Unraveling the knot: Organized labor and the complexity of CEO compensation}},
  author       = {Stephen P. Ferris et al.},
  journal      = {Journal of Financial Research},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1111/jfir.70043},
}

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Unraveling the knot: Organized labor and the complexity of CEO compensation

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.