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CEO Pay and the Argument from Peer Comparison

Author

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  • Joakim Sandberg

    (University of Gothenburg)

  • Alexander Andersson

    (University of Gothenburg)

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.

Suggested Citation

  • Joakim Sandberg & Alexander Andersson, 2022. "CEO Pay and the Argument from Peer Comparison," Journal of Business Ethics, Springer, vol. 175(4), pages 759-771, February.
    • Handle: RePEc:kap:jbuset:v:175:y:2022:i:4:d:10.1007_s10551-020-04587-1
    DOI: 10.1007/s10551-020-04587-1
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    References listed on IDEAS

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    2. Xu, Yong & Ji, Junzhe & Li, Nicolas & Borah, Dhruba, 2024. "How do executive excess compensation affect enterprise technological innovation: Evidence from a panel threshold model of chinese biopharmaceutical companies," Journal of Business Research, Elsevier, vol. 179(C).

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