CEO Pay and the Argument from Peer Comparison

Joakim Sandberg () and Alexander Andersson ()
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Joakim Sandberg: University of Gothenburg
Alexander Andersson: University of Gothenburg

Journal of Business Ethics, 2022, vol. 175, issue 4, No 6, 759-771

Abstract: Abstract Chief executive officers (CEOs) are typically paid great amounts of money in wages and bonuses by commercial companies. This is sometimes defended with an argument from peer comparison; roughly that “our” CEO has to be paid in accordance with what other CEOs at comparable companies get. At first glance this seems like a poor excuse for morally outrageous pay schemes and, consequently, the argument has been ignored in the previous philosophical literature. In contrast, however, this article provides a partial defence of the argument from peer comparison. Moreover, it is demonstrated how a serious consideration of this argument sheds further light on both incentive- and desert-based theories of just pay.

Keywords: CEO compensation; Incentives; Desert (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s10551-020-04587-1

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