Pay Harmony? Social Comparison and Performance Compensation in Multibusiness Firms

The authors thank Nick Argyres and two anonymous referees for very helpful feedback. They also appreciate comments from Iwan Barankay, Luis Cabral, Constanca Esteves-Sorenson, Carola Frydman, Denis Gromb, Maria Guadalupe, Peter Kuhn, Mark Leary, Ian Larkin, Francine Lafontaine, Chris Malloy, Andrew McElheran, Stephan Meier, Kevin Murphy, Lamar Pierce, Antoinette Schoar, Kelly Shue, Tim Simcoe, Geoff Tate, and Todd Zenger, as well as participants at the MIT Organizational Economics Seminar, NYU Economics of Strategy summer workshop, Columbia Strategy Conference, Center for Research in Economics and Strategy conference at Washington University, Society of Labor Economics, and seminars at the Kellogg School of Management, INSEAD, the University of Illinois, Massachusetts Institute of Technology, the University of Rochester, Stanford University, Cornell University, and the University of Southern California, Berkeley.