Title

Executive compensation and moral luck

Department/School

Ethics and Business Law

Date of this version

2015

Document Type

Article

Keywords

Business ethics, executive compensation, moral luck

Abstract

Executive compensation is wrought with problems of moral judgment. To the extent that compensation rewards or penalizes behavior for which an executive is not justifiably responsible, it is also a problem of luck. Although executive compensation is both a problem of morality and luck, moral luck—which seems to occur when our moral judgments about a moral agent's conduct or character are influenced by factors beyond the agent's control—has not been a factor in the compensation debate. There remains controversy as to whether moral luck is a real or imagined problem, but if it exists, it should be factored into the compensation equation; if it does not, we cannot deny that moral performance presents a measurement problem. Thus, we are forced to accept that moral luck, real or imagined, has important implications for the ways and means by which executives are compensated.

Published in

Business and Professional Ethics Journal

Citation/Other Information

34(2), 237-258

Creative Commons License

Creative Commons Attribution 4.0 License
This work is licensed under a Creative Commons Attribution 4.0 License.

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