Document Type
Article
Publication Date
2025
Keywords
executive compensation, geographic preference, human capital, executive mobility, top management teams
Abstract
Human capital is crucial for sustainable competitive advantage, and certain workforce groups have a greater impact than others. The top management team, responsible for directing firm strategy and structure, is one such group, and executive turnover can be detrimental for a firm. While existing literature often suggests that executives change jobs primarily for higher pay, this is not always true. Drawing on human capital research and the geographic preference theory, we examine how an executive’s human capital and geographic preferences affect changes in compensation during job transitions. Using a sample of 351 executives who moved among S&P 500 companies from 2000 to 2015 (378 inter-organizational moves), we find that education (a proxy for human capital) and area desirability (a proxy for geographic desirability) correlate with changes in executive compensation. Additionally, a higher density of geographically proximal executive pay packages increases an executive’s compensation premium when changing jobs.
Citation
Giannakis, P., Roumpi, D., Aydinliyim, L. E., & Delery, J. E. (2025). Executive Compensation: The Role of Human Capital and Geographic Preferences. Compensation & Benefits Review, 57(2), 87-102. https://doi.org/10.1177/08863687241299191
Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.
