Business Students' Justifications of Exceptionally High Salaries

Abstract

A sample of 164 business students rated the fairness and appropriateness of 14 justifications for someone receiving a salary of $2 million a year. The occupation (marketing executive, movie star) and the gender of the person being rated were manipulated. Also manipulated was the response condition: whether one responded as if they were the $2 million salary recipient or whether the recipient was someone else. The results show that certain types of factors (e.g., inputs such as hard work, talent, and performance) are seen as better justifications than other factors (e.g., external factors such as positive benefits to society or difficulty of the job). There were very few gender differences in justifications, but the different occupations were related to different justifications. Also, people felt the salary was fairer and more justified when they were perceived as receiving the money than when it was someone else. The results are discussed in terms of theoretical and practical issues related to student perceptions of executive compensation.