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How Much Compensation Can CEOs Permissibly Accept?

Published online by Cambridge University Press:  23 January 2015

Jeffrey Moriarty
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Abstract:

Debates about the ethics of executive compensation are dominated by familiar themes. Many writers consider whether the amount of pay CEOs receive is too large—relative to firm performance, foreign CEO pay, or employee pay. Many others consider whether the process by which CEOs are paid is compromised by weak or self-serving boards of directors. This paper examines the issue from a new perspective. I focus on the duties executives themselves have with respect to their own compensation. I argue that CEOs’ fiduciary duties place a moral limit on how much compensation they can accept, and hence seek in negotiation, from their firms. Accepting excessive compensation leaves the beneficiaries of their duties (e.g., shareholders) worse off, and thus is inconsistent with observing those duties.

Type
Articles
Information
Business Ethics Quarterly , Volume 19 , Issue 2 , April 2009 , pp. 235 - 250
Copyright
Copyright © Society for Business Ethics 2009

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