We examine how supplier industry competition affects CEO incentive intensity in procuring firms. Using Bureau of Economic Analysis data to compute a weighted supplier industry competition measure, we predict and find that higher supplier competition is associated with stronger CEO pay-for-performance incentive intensity. This effect is incremental to that of the firm's own industry competition previously documented and is robust to alternative measures of supplier competition and to exogenous shocks to competition. Importantly, we show that performance risk and product margin act as mediating variables in the relation between supplier competition and CEO incentive intensity providing support for the theory underpinning our finding. We document that CEO compensation contracts are used as a mechanism to exploit the market dynamics of upstream industries to a firm's benefit. Our findings are economically important as suppliers provide, on average, 45 percent of the value delivered by procuring firms to the market (BEA, 2016).

我们研究了供应商行业的竞争如何影响采购公司中CEO的激励强度。我们使用经济分析局的数据来计算加权的供应商行业竞争指标，我们预测并发现，更高的供应商竞争与更强的CEO绩效薪酬激励强度相关。这种影响是以前记录的公司自身行业竞争的影响的增量，并且对于供应商竞争的替代措施以及竞争的外来冲击具有鲁棒性。重要的是，我们表明，绩效风险和产品利润率是供应商竞争与CEO激励强度之间关系的中介变量，为支持我们发现的理论提供了支持。我们记录到，CEO薪酬合同被用作一种机制，以利用上游产业的市场动态来为企业谋取利益。我们的发现在经济上很重要，因为供应商平均提供了采购公司向市场交付的价值的45％（BEA，2016年）。