Economic, Moral, and Motivational Criteria of Executive Compensation: Recent Developments

Abstract

Recent economic developments have renewed societal debate about executive compensation practices in business organizations. This study explores economic, moral, and motivational criteria in decisions about how to best compensate executives in organizations. The essay devotes particular attention to new developments in this controversial debate. The authors propose that managerial work implies a kind of fiduciary trust necessary for the proper functioning of business activity and argue that executive compensation decisions and levels should be based on objective criteria.