Executive Compensation

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review

2 Scopus citations

Abstract

Executive compensation is frequently under moral pressure in public discussions. This article discusses whether high payment of top executives can be ethically justified, and if so, under which conditions. Different arguments are scrutinized. The tentative conclusion is that high executive compensation is generally justified, provided certain conditions are met: No fraud or breach of fiduciary duty must be involved. Also, the ethical rationale behind the market economy must be accepted. However, changes in rules regarding executive compensation can be ethically and economically desirable, such as greater disclosure of executive payment.

Original languageEnglish
Title of host publicationEncyclopedia of Applied Ethics
Subtitle of host publicationVolume 1-4, Second Edition
PublisherElsevier
Pages243-249
Number of pages7
Volume1-4
ISBN (Electronic)9780123739322
ISBN (Print)9780123736321
DOIs
StatePublished - 1 Jan 2012

Keywords

  • Bonuses
  • Dismissal
  • Executive compensation
  • Golden handshake
  • Golden parachute
  • Incentive plans
  • Just payment
  • Justice
  • Normativity
  • Principal-agent approach
  • Prisoners’ dilemma
  • Smith, Adam
  • Social market economy
  • Stock options

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