Abstract
While there exist extensive literatures on both distributive justice and senior executive pay, and a number of authors (notably the French economist Thomas Piketty) have addressed the implications of high pay for distributive justice, the existing literature fails to address what senior executives themselves think about distributive justice and whether they consider high income inequalities to be morally acceptable. We address this gap by analysing a unique dataset comprising the views of over 1000 senior executives from across the world, which was constructed using a survey instrument designed by the authors based on a thought experiment resembling John Rawls’s original position. We report four main findings. First, executives conceptualise distributive justice in a pluralistic manner, endorsing different and sometimes apparently conflicting philosophical principles: to explain how this plurality can be accounted for we propose a novel field-theory framework for conceptualising beliefs about distributive justice. Second, executives support similar philosophical approaches at both society and company levels of analysis, thus countering the idea that companies should leave matters of distributive justice exclusively for governments to deal with via the tax system. Third, executives believe that they live in societies and work for companies that fall short of desirable distributive justice outcomes. Fourth, the distributive justice views of the executives in our sample fall into four distinct clusters that are correlated with certain socio-demographic markers. Finally, we note the distinction between distributive justice beliefs and behaviours, from which we derive a number of managerial and public policy implications.
Highlights
Over the past two decades, the compensation received by those employed at the top of companies (“supermanagers” according to Piketty 2014) has risen dramatically, continuing a trend that began in the 1980s
In response to (1), we find that business executives conceptualise distributive justice in a pluralistic manner, 1 In other empirical investigations, Magnan and Martin (2019) argue that the available data suggest that business executives apply principles of distributive justice in an incoherent manner so as to create the impression that large income inequalities are morally justified
These findings indicate that senior executives do not in general believe that the currently prevailing high pay inequalities are just and might be expected to endorse smartly designed reforms aimed at lowering inequality
Summary
Over the past two decades, the compensation received by those employed at the top of companies (“supermanagers” according to Piketty 2014) has risen dramatically, continuing a trend that began in the 1980s. The incomes of regular employees have more or less stagnated in real terms (Willman and Pepper 2020). In combination, these two developments have fuelled the widely held belief that our societies, and the companies operating within them, have become increasingly unjust (Atkinson 2015). There is an ongoing discussion as to whether the dramatic rise in wage inequality can be explained solely by economic factors: for recent reviews, see Lemieux et al (2009) for the United States and Bell and Van Reenen (2013) for the UK. From a business ethics perspective, most contributions have focused on whether the explanations proposed by economists might render large income inequalities morally justified or, more precisely, distributively just. What is missing from the literature is an empirical investigation into what business executives think about distributive justice, and, by implication, whether they consider high
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