What's Wrong with Executive Compensation?

Harris, Jared D.

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What's Wrong with Executive Compensation?

Journal of Business Ethics, Vol. 85, pp. 147-156

Darden Business School Working Paper No. 1175382

22 Pages Posted: 31 Jul 2008 Last revised: 3 May 2009

See all articles by Jared D. Harris

Jared D. Harris

University of Virginia - Darden School of Business

Date Written: 2009

Abstract

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

Harris, Jared D., What's Wrong with Executive Compensation? (2009). Journal of Business Ethics, Vol. 85, pp. 147-156, Darden Business School Working Paper No. 1175382, Available at SSRN: https://ssrn.com/abstract=1175382