RT Article
T1 An Ethical Perspective on CEO Compensation
JF Journal of business ethics
VO 48
IS 4
SP 381
OP 391
A1 Perel, Mel
LA English
YR 2003
UL https://ixtheo.de/Record/1785620770
AB The controversial issue of whether Chief Executive Officer (CEO) compensation is excessive or appropriate is examined in terms of two competing claims: that CEOs are overpaid for the value they provide to an enterprise, and that CEO compensation is inherently equitable. Various arguments and perspectives on both sides of the issue are assessed. Little evidence supports the claim that CEO performance justifies very high compensation. Further, the complex interactive alliance between boards of directors and CEOs compromises rational decision-making about CEO compensation, with the Enron affair offered as an illustration of what can go wrong when dishonest CEO actions combine with lax board oversight. Recommendations for restoring trust in the system include continuing current regulatory actions, using different metrics for determining CEO compensation, making board member-CEO relationships transparent to all company stakeholders, and several more radical ideas for change. Stakeholders must resist being distracted by other social, economic, or political issues from pursuing serious, lasting reform.
K1 stock options
K1 overpaid CEOs
K1 excessive compensation
K1 compensation committees
K1 Compensation
K1 CEO compensation
K1 Business Ethics
K1 Board of directors
DO 10.1023/B:BUSI.0000005803.24077.55