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.
Highlights
Commercial companies typically pay their highest-ranking officers and executives, especially their chief executive officer (CEO), vast amounts of money in wages and bonuses
Summarising our comments above, we have argued that desert-based views can give credence to the argument from peer comparison and provide a partial defence of current levels of CEO pay in some cases
This article has been a philosophical exploration of the argument from peer comparison as a defence of the current very high levels of CEO pay in individual cases
Summary
Commercial companies typically pay their highest-ranking officers and executives, especially their chief executive officer (CEO), vast amounts of money in wages and bonuses. We have argued that the argument from peer comparison, in connection with incentive-based justifications of CEO pay, provides at least a partial defence of the current very high levels in some cases. One could argue that employees should be compensated for further sacrifices such as the amount of skills and training required for the job or the level of responsibility and risk involved Those who favour this view over the reward view typically emphasise its more direct link to personal control and responsibility: Whereas you can control the input you make—that is, what effort and sacrifice you endure in a job—you seldom have as much control over the output—that is, your contribution to the company’s profits (which often depends on external contingencies such as market supply and demand, currency fluctuation, and so on). Could it be that we are under the sway of this irrational attraction in our intuitions about economic desert, and that we should take them with a grain of salt? could this be the root of our insistence on intra-occupational parity?
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