The role of ethics in executive compensation: Toward a contractarian interpretation of the neoclassical theory of managerial renumeration [Book Review]
David Bourget (Western Ontario)
David Chalmers (ANU, NYU)
Rafael De Clercq
Jack Alan Reynolds
Learn more about PhilPapers
Journal of Business Ethics 13 (2):81 - 93 (1994)
The topic of Chief Executive Officer (CEO) compensation has been a focus of interest for many years. The purpose of this article is to explore the ethical dimensions of various generally accepted theories of CEO renumeration. We argue that a contractarian approach, based on the Kantian ethical framework, can be used to augment the existing contingent pay models.While the neoclassical economic model of the firm views the maximization of the shareholders'' wealth as the sole responsibility of top management, a contractarian approach regards the balancing of various stakeholders'' interests as the primary task of top management. Ethical problems emerge when there are divergent, yet equally justifiable interests which compete in order to channel organizational resources to meet their own needs. In this situation, given the inherent ambiguities and ever present possibilities of multiple perspectives, it may not always be feasible to provide a categorical answer to the question of whether the CEO''s decisions are ethical. We suggest that a broad interpretation of the neoclassical theory of the firm, one that is grounded in Kantian and contractarian ethics, can serve as a basis for a reconciliation of different theories of executive compensation.
|Keywords||No keywords specified (fix it)|
|Categories||categorize this paper)|
Setup an account with your affiliations in order to access resources via your University's proxy server
Configure custom proxy (use this if your affiliation does not provide a proxy)
|Through your library|
References found in this work BETA
No references found.
Citations of this work BETA
Jeffrey Moriarty (2012). Justice in Compensation: A Defense. Business Ethics 21 (1):64-76.
Knut J. Ims, Lars Jacob Tynes Pedersen & Laszlo Zsolnai (2013). How Economic Incentives May Destroy Social, Ecological and Existential Values: The Case of Executive Compensation. Journal of Business Ethics:1-8.
Marjorie Chan (2008). Executive Compensation. Business and Society Review 113 (1):129-161.
Similar books and articles
Bruce Walters, Tim Hardin & James Schick (1995). Top Executive Compensation: Equity or Excess? Implications for Regaining American Competitiveness. [REVIEW] Journal of Business Ethics 14 (3):227 - 234.
Ella Mae Matsumura & Jae Yong Shin (2005). Corporate Governance Reform and CEO Compensation: Intended and Unintended Consequences. [REVIEW] Journal of Business Ethics 62 (2):101 - 113.
Obeua S. Persons (2006). The Effects of Fraud and Lawsuit Revelation on U.S. Executive Turnover and Compensation. Journal of Business Ethics 64 (4):405 - 419.
Waymond Rodgers & Susana Gago (2003). A Model Capturing Ethics and Executive Compensation. Journal of Business Ethics 48 (2):189-202.
Donald Nichols & Chandra Subramaniam (2001). Executive Compensation: Excessive or Equitable? [REVIEW] Journal of Business Ethics 29 (4):339 - 351.
Mel Perel (2003). An Ethical Perspective on CEO Compensation. Journal of Business Ethics 48 (4):381-391.
James A. Brander (2006). The Effect of Ethical Fund Portfolio Inclusion on Executive Compensation. Journal of Business Ethics 69 (4):317 - 329.
Julian Friedland (2010). A Fair Wage? Capping Executive Compensation. Journal of Business Ethics Education 7:129-139.
Jeffrey Moriarty (2009). How Much Compensation Can CEOs Permissibly Accept? Business Ethics Quarterly 19 (2):235-250.
John Dobson (2011). A Moral and Economic Defense of Executive Compensation. Business and Professional Ethics Journal 30 (1-2):59-70.
Added to index2009-01-28
Total downloads44 ( #53,688 of 1,696,506 )
Recent downloads (6 months)6 ( #93,751 of 1,696,506 )
How can I increase my downloads?