Does CEO pay matter for a company’s ethical culture?
There’s a lot (and I mean, a lot!) of public discourse on overpaid CEOs. There are disclosure requirements on the CEO pay gap (not fit for purpose, but they exist), and a ton of shareholder resolutions on the topic too.
But it’s one of those “everyone’s doing it” situations, and incentives in general are an area where companies move in a herd. (The stampede into ESG incentives is a recent example here). What should and can responsible companies do?
We don’t like to make knee jerk assumptions at Ethical Systems, so we decided to take a look at the research and ask the question: How much does CEO pay really matter for a company’s ethical culture?