Werner, SteveTosi, Henry L.2019-10-012019-10-0112/1/1995Copyright 1995 Academy of Management Journal. Recommended citation: Werner, S., and Tosi, H.L. 1995. Other People's Money: The Effects of Ownership on Compensation Strategy and Managerial Pay. Academy of Management Journal, 38(6): 1672-1691. DOI: 10.5465/256849 URL: https://journals.aom.org/doi/pdf/10.5465/256849 Reproduced in accordance with the original publisher’s licensing terms and with permission from the author(s).https://hdl.handle.net/10657/4919This study analyzes the compensation strategy of firms. We examined differences in the pay and incentives of lower-level managers in firms with different levels of management discretion. We found that firms with higher managerial discretion paid compensation premiums through higher salaries, greater bonuses, and more long-term incentives; however, changes in pay were not related to changes in performance, and high-discretion firms did not perform better than other types of firms.en-USCompensation managementExecutive compensationPensionsXecutivesWagesJob performanceIncentives in industryLabor costsOrganizational sociologyPersonnel managementArticle