Corporate Law as Public Law: Executive Pay and Economic Concentration as Agents of Change

Abstract:     
Corporate law has long been considered a bastion of private ordering, granting individual and institutional investors a regime of default rules designed to maximize returns and streamline business management. Recently, public debates regarding executive pay and the increasing size of firms and conglomerates have threatened this view, suggesting corporate law deal with 'public' issues and ideological constraints on the manner in which business is run.

This paper explores the role of corporate law in public and political debates in Israel's recent 'social justice protest' and shows how technical rules of corporate governance are being re-shaped by political ideology. While risks exist for the coherence of business law, those promoting political use of corporate law overlook the potential detrimental effects on the public debate as well. Using technical and professional jargon may seem to lend legitimacy and 'scientific objectivity' to the debate, but at a cost. Ideological use of corporate law biases political debates in directions proponents of regulation might not have foreseen, undermining not only corporate 'purity' but social justice concerns as well.

Note: Downloadable document is in Hebrew.

Number of Pages in PDF File: 27

Keywords: executive compensation, economic concentration, corporate governance

JEL Classification: G34, K22, M14

Accepted Paper Series