Executive Compensation and Employee Remuneration: The Flexible Principles of Justice in Pay

Magnan, Michel; Martin, Dominic

doi:10.1007/s10551-018-3786-5

Cited by 23 publications

(18 citation statements)

References 55 publications

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“…According to Magnan and Martin (2018), the ethical dimension of remuneration at the top continues to be one of the least studied areas and we would say even less formally spoken in organisations. In this concrete case, two questions arise.…”

Section: Discussionmentioning

confidence: 99%

Ethics beyond leadership: can ethics survive bad leadership?

Roque

Moreira

Figueiredo

et al. 2020

JGR

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Purpose The purpose of this paper is to contribute to the relaxion on what can be done to develop ethical cultures that may be less permeable and more resilient to changes in leadership from an ethical point of view. The influence of leaders on organisational ethics is recognised, and there are even those who consider that it is not possible to maintain an ethical culture when leaders are not engaged. But, if this theory is true, all business ethics programmes that can be created, and the cultures that can gradually be developed in organisations, will always have their existence and robustness suspended at each leadership change. How to maintain an ethical culture beyond leadership? Design/methodology/approach As a strategy, we used the case study with a narrative methodology, in which a chief executive officer (CEO) and a chief compliance officer (CCO) narrate in the first person a case of perceived collapse of the ethical culture of a multinational company. Findings The findings point to the difficulty in maintaining ethical leadership. Key aspects to protect an organization from leadership changes are as follows: the management of the succession process, the quality of the training on ethics and the mechanisms developed by the organization to foment speak up and take notice of the situations. Moral blindness and the banality of evil that also can be observed in organizations appear as facilitating elements for collapse. Originality/value Ethical leadership is generally presented as a necessary condition for an ethical culture. However, leaders often have unethical or ethically neutral leadership. This case helps to understand the difficulties experienced by leaders in adopting ethical leadership and proposes a set of instruments and procedures that, when included in an ethical programme, can protect the company's ethical culture against unethical leaders. Some characteristics of our case study make it particularly relevant: action occurs in a multinational, a context where, by size and complexity, achieving uniformity in culture becomes particularly relevant, and actions happen in the context of a CEO succession process, something that may occur in any company and which is often a trigger for ethical misconducts. Additionally, our case is narrated by a CEO and a CCO, which makes it rare, as it is especially difficult to have access to these executives.

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Section: Discussionmentioning

confidence: 99%

Ethics beyond leadership: can ethics survive bad leadership?

Roque

Moreira

Figueiredo

et al. 2020

JGR

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“…Executive remuneration has been a sensitive issue for a long time. Researchers have shown a sustained interest in understanding the determinants of executive remuneration (Bullock, Stritch, & Rainey, 2015;Datta & Iskandar-Datta, 2014;Pandher & Currie, 2013), as well as the difference between executive remuneration and employee remuneration (Magnan & Martin, 2018). Executive remuneration, both in terms of its quantum and the disparity between top and bottom wage earners, has become a major cause of social discontent, fuelling the debate on inequality (IoDSA, 2016).…”

Section: Introductionmentioning

confidence: 99%

“…The King IV Report on Corporate Governance recognises that this has become a key governance issue, with major implications for long-term corporate sustainability. However, executives and employees may be paid differently because they perform different types of work and/or have different contractual agreements with the firm (Magnan & Martin, 2018). Kelynhans (2018) contend that executives, in particular, have duties derived from the common law and the Companies Act 71 of 2008 as amended (the Act), which include honesty, loyalty and good faith.…”

Section: Introductionmentioning

confidence: 99%

“…In terms of the Act, the fiduciary duties of executives are not only mandatory and unalterable, but also prescriptive and applicable to all companies. However, Magnan and Martin (2018) argue that the normative principles that define a just pay should be the same for both employees and executives. That is, when reporting on the structure of remuneration paid to employees below the executive level, an organisation should focus on its approach towards fair and responsible pay and its commitment to eliminate all instances of unjustified differentiation between employees doing work that is the same or substantially the same (Green, 2018).…”

Section: Introductionmentioning

confidence: 99%

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The relationship between the determinants of executive remuneration in South African state-owned enterprises

Maloa

2020

SA j. hum. resour. manag.

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Orientation: Research on executive remuneration should be able to indicate the necessary elements and dimensions at work when deciding on an executive’s package.Research purpose: The purpose of this article was to review a correlation of elements as determinants of executive remuneration.Motivation for the study: The limited research on executive remuneration tends to focus on how executive pay varies with performance and less on the determinants of executive remuneration.Research design and method: A quantitative research method was used. The target population consisted of executives from 21 South African state-owned enterprises (SOEs). The research design was a cross-sectional study. A categorical multiple regression analysis was performed.Main findings: The research results seem to suggest that there is a significant statistical correlation between organisation size and type of industry; job function and type of industry; organisation size and job function; and the level of education and job function as a determinant of executive remuneration within the context of South African SOEs. However, the extent of the correlations between the determinants of executive remuneration is not the same.Practical/managerial implications: The research results create awareness amongst human resources practitioners and consultants of the extent to which some of the determinants of remuneration may apply in practice.Contribution/value-add: This study highlights the importance of probing further with the effect of size correlation in quantitative research in the context of executive remuneration.

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“…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 Pepper et al (2015). investigate to what extent executives care about how their compensation compares to the compensation of peers.…”

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confidence: 99%

What Do Business Executives Think About Distributive Justice?

2020

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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.

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Executive Compensation and Employee Remuneration: The Flexible Principles of Justice in Pay

Cited by 23 publications

References 55 publications

Ethics beyond leadership: can ethics survive bad leadership?

Ethics beyond leadership: can ethics survive bad leadership?

The relationship between the determinants of executive remuneration in South African state-owned enterprises

What Do Business Executives Think About Distributive Justice?

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