Executive compensation has been in the news as part of an ongoing discussion of income inequality but as james o'toole, the moderator of a panel called executive compensation at a recent meeting of the business and organizational ethics partnership at santa clara university's markkula center for applied ethics, said, there is a question as to whether a problem even exists.
2) executives sometimes are paid too much — too much, that is, by any standard other than cronyism that is, sometimes executive compensation committees make bad decisions, in some cases because they’re insufficiently independent of the ceo 3) many people hate the rich and many (not all) corporate ceos are rich.
The ethics of executive compensation there are multiple ethical issues with executive compensation these include whether such compensation is excessive compared against provision of service and whether the compensation process is compromised by inadequately transparent negotiation (perel 2003, p 381 moriarty 2009, p 235. Under the egoist viewpoint, executive compensation policy is determined based on the perspective of the ceo, with little regard to the policy’s effect on stakeholders (rodgers & gago, 2003. 2 abstract executive compensation has been a target for criticism by stakeholders and academics over the past several years corporate executives have been receiving.
Corporate ethics and chief executive officer (ceo) compensation will be forever linked together the dramatic increase in recent corporate scandals has driven increased scrutiny of the enormous executive salaries that ceos collect each year the connection between these two topics led me to explore how executive compensation plans are designed and how ethics affect executives’ decision making.
Executive compensation is a key corporate governance issue and boards have been, for the most part, derelict in their responsibilities to oversee compensation and ensure ethical practices for example, in a society for human resources 2006 survey , ethics compliance accounted for only 10% in factors determining cash bonuses.