Income differentials and corporate performance
2011; Emerald Publishing Limited; Volume: 11; Issue: 5 Linguagem: Inglês
10.1108/14720701111176993
ISSN1758-6054
AutoresAdrian Pryce, Nada Kakabadse, Tom Lloyd,
Tópico(s)Corporate Social Responsibility Reporting
ResumoPurpose This paper seeks to make the case for new research into the perceived fairness and impact of executive pay. Design/methodology/approach The paper reviews the literature regarding executive compensation and corporate performance and examines the evidence that a more egalitarian approach to pay could be justified in terms of long‐term shareholder value. Findings There would appear to be no evidence to suggest that the growing gap between the pay of executives and that of the average employee generates long‐term enterprise value, and it may even be detrimental to firms, if not the liberal capitalist consensus on which the corporate licence to operate is based. Research limitations/implications The paper outlines a new approach to tracking income differentials with corporate performance through the development of a corporate Gini coefficient “league table”. Social implications The proposed research is expected to point towards better practice in executive remuneration, and support the growing momentum for a sustainable and enlightened approach to business, in which the key goal is long‐term enterprise value based on a fair distribution of the rewards of business. Originality/value In producing a deeper understanding of the impact of widening income differentials, the paper should be of interest to senior executives in publicly quoted companies as well as press commentators, government officials and academics.
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