What's Wrong with Executive Compensation?
22 Pages Posted: 31 Jul 2008 Last revised: 3 May 2009
Date Written: 2009
I broadly explore the question by examining several common criticisms of CEO pay through both philosophical and empirical lenses. While some criticisms appear to be unfounded, the analysis shows not only that current compensation practices are problematic both from the standpoint of distributive justice and fairness, but also that incentive pay ultimately exacerbates the very agency problem it is purported to solve.
Keywords: Executive compensation, distributive justice, pay disparity, incentive alignment
JEL Classification: D63, J23, J31, J33, J38, J44, M51, M52
Suggested Citation: Suggested Citation