The future of defined benefit (DB) pensions is a hotly debated topic in reward management.
Drawing on agency and managerial power theories, we examine the conditions under which
CEOs can affect their sustainability. We find when the CEO is a member of the same DB
plan as their employees or when the CEO is both a member and a trustee ...
The future of defined benefit (DB) pensions is a hotly debated topic in reward management.
Drawing on agency and managerial power theories, we examine the conditions under which
CEOs can affect their sustainability. We find when the CEO is a member of the same DB
plan as their employees or when the CEO is both a member and a trustee of the plan, this
affects the agency and power dynamics increasing the likelihood of these plans being
retained. To address endogeneity concerns, we use propensity score matching to mimic
randomization and our results continue to hold. Using the introduction of pension tax
penalties as an exogenous shock on CEO self-interest, we find it affects the propensity of DB
plan closures. Our study highlights the key role that CEO incentives play on pensionprovision decisions and indicates how HR practitioners/regulators can harness CEO selfinterest to safeguard the sustainability of DB pension plans.