Executive Pay and Legitimacy: Changing Discursive Battles Over the Morality of Excessive Manager Compensation [Book Review]

Journal of Business Ethics 116 (3):459-477 (2013)
Abstract
How is the (il)legitimacy of manager compensation constructed in social interaction? This study investigated discursive processes through which heavily contested executive pay schemes of the Finnish energy giant Fortum were constructed as (il)legitimate in public during 2005–2009. The critical discursive analysis of media texts identified five legitimation strategies through which politicians, journalists, and other social actors contested these schemes and, at the same time, constructed subject positions for managers, politicians, and citizens. The comparison of two debate periods surrounding the 2007–2008 financial crisis revealed significant differences in the discursive strategies and the corresponding moral struggles linked to legitimation of executive compensation. The analysis highlights a change in moral reasoning by social actors as they adapt their justifications to a changing social context. This study has important implications for our understanding of the ethical aspects and socio-political embeddedness of manager compensation. In particular, it adds to our knowledge of organizational legitimacy by showing how discursive strategies and the corresponding morality constructions used to (de)legitimate business activities can shift quickly as a result of a change in the social and political climate surrounding the legitimation struggle
Keywords Discourse  Executive compensation  Financial crisis  Legitimacy  Media  Moral reasoning
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DOI 10.1007/s10551-012-1485-1
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References found in this work BETA

Modern Social Imaginaries.Charles Taylor - 2003 - Duke University Press.
The New Rhetoric: A Treatise on Argumentation.Chaïm Perelman - 1969 - Notre Dame, [Ind.]University of Notre Dame Press.

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