Is the sky the limit? Fair executive pay as performance rises

Beste Esra BURAK HO

Research output: Journal PublicationsJournal Article (refereed)

Abstract

Recent research documents the public discontent with high income inequality yet an important limitation in our understanding is why such high pay is problematic according to many Americans. This study juxtaposes two explanations for the discontent that many Americans have shown regarding high Chief Executive Officer (CEO) pay: a) that the American discontent with extremely high CEO pay stems mainly from a belief that CEOs are not contributing highly enough to merit such high pay and b) the American discontent with extremely high pay is due to such pay being objectionable in principle. Using data from a national survey experiment (N = 989) uniquely designed to test these propositions, this study evaluates the relationship between performance and fair CEO pay. Respondents show aversion to high CEO pay while also embracing the principle of proportionality of rewards and contributions. Findings suggest that discontent with extremely high pay may be reconciled with support for pay for performance: the slope of the pay and performance function may be at issue rather than a hard limit on pay.
Original languageEnglish
Pages (from-to)211-230
Number of pages20
JournalSocial Problems
Volume65
Issue number2
Early online date2 Mar 2017
DOIs
Publication statusPublished - May 2018

Keywords

  • income inequality
  • distributive justice
  • executive compensation
  • attitudes
  • fair pay

Fingerprint Dive into the research topics of 'Is the sky the limit? Fair executive pay as performance rises'. Together they form a unique fingerprint.

  • Cite this