David Bourget (Western Ontario)
David Chalmers (ANU, NYU)
Rafael De Clercq
Jack Alan Reynolds
Learn more about PhilPapers
Business and Professional Ethics Journal 30 (1-2):59-70 (2011)
A great deal has been written in recent years about the justification, if any, for the current levels of executive compensation. The folk consensus is that the current levels of executive compensation are unjustifiably high from both a moral and an economic perspective. In the case of the former, the compensation level is unfair and unjust. And in the case of the latter, the compensation level is not in the broader interests of other stakeholders or of firm-value maximization.In this paper I counter this folk wisdom. I argue that executive compensation is a facet of the Stockholder Model, in which the primary objective of the firm is taken to be the maximization of shareholder wealth, and as such any moral critique of executive compensation is by default a critique of the Stockholder Model. Thus a necessary and sufficient condition for a moral defense of executive compensation is a moral defense of the Stockholder Model. I provide such a defense. Once the Stockholder Model is accepted then any moral or economic defense of executive compensation rests on its compatibility with shareholder wealthmaximization. I argue that the current levels of executive compensation are consistent with the overarching corporate goal of shareholder wealth maximization. Thus the current levels of executive compensation are both morally and economically justified
|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
No citations found.
Similar books and articles
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.
Waymond Rodgers & Susana Gago (2003). A Model Capturing Ethics and Executive Compensation. Journal of Business Ethics 48 (2):189-202.
Allan S. Ashley & Simon S. M. Yang (2004). Executive Compensation and Earnings Persistence. Journal of Business Ethics 50 (4):369-382.
James A. Brander (2006). The Effect of Ethical Fund Portfolio Inclusion on Executive Compensation. Journal of Business Ethics 69 (4):317 - 329.
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.
Julian Friedland (2010). A Fair Wage? Capping Executive Compensation. Journal of Business Ethics Education 7:129-139.
Linda L. Carr & Moosa Valinezhad (1994). The Role of Ethics in Executive Compensation: Toward a Contractarian Interpretation of the Neoclassical Theory of Managerial Renumeration. [REVIEW] Journal of Business Ethics 13 (2):81 - 93.
Virginia Bodolica, Michel Magnan & Martin Spraggon (2007). Merger and Acquisition Related Determinants of Executive Compensation Arrangements' Adoption. International Journal of Business Governance and Ethics 3 (4):407-429.
Jeffrey Moriarty (2012). Justice in Compensation: A Defense. Business Ethics 21 (1):64-76.
Jeffrey Moriarty (2009). How Much Compensation Can CEOs Permissibly Accept? Business Ethics Quarterly 19 (2):235-250.
Lawrence A. Vitulano & S. J. Hannafey (2009). Economic, Moral, and Motivational Criteria of Executive Compensation: Recent Developments. Open Ethics Journal 3 (2):67-70.
Mel Perel (2003). An Ethical Perspective on CEO Compensation. Journal of Business Ethics 48 (4):381-391.
Lois Schafer Mahoney & Linda Thorn (2006). An Examination of the Structure of Executive Compensation and Corporate Social Responsibility: A Canadian Investigation. [REVIEW] Journal of Business Ethics 69 (2):149 - 162.
Donald Nichols & Chandra Subramaniam (2001). Executive Compensation: Excessive or Equitable? [REVIEW] Journal of Business Ethics 29 (4):339 - 351.
Ye Cai, Hoje Jo & Carrie Pan (2011). Vice or Virtue? The Impact of Corporate Social Responsibility on Executive Compensation. Journal of Business Ethics 104 (2):159-173.
Added to index2011-12-01
Total downloads14 ( #119,025 of 1,100,145 )
Recent downloads (6 months)1 ( #304,144 of 1,100,145 )
How can I increase my downloads?