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Shame sanctions and excessive CEO pay
journal contribution
posted on 2007-01-01, 00:00 authored by Sandeep GopalanThe debate over excessive CEO compensation has roiled scholars,
corporations, and the government for some time. This article suggests that there is an alternate way of attacking the problem of excessive executive pay—one that sidesteps the law and instead appeals to executives' emotions. Shame sanctions, as they are called, offer a nonlegal route to curbing exorbitant CEO compensation. This article argues that increased disclosure of executives' compensation agreements will trigger emotions like shame, guilt and embarrassment by corporations and executives. This in turn has the potential to influence financial behavior and cause corporations to be more likely to heed the concerns of the public and shareholders vis-à-vis executive pay.
corporations, and the government for some time. This article suggests that there is an alternate way of attacking the problem of excessive executive pay—one that sidesteps the law and instead appeals to executives' emotions. Shame sanctions, as they are called, offer a nonlegal route to curbing exorbitant CEO compensation. This article argues that increased disclosure of executives' compensation agreements will trigger emotions like shame, guilt and embarrassment by corporations and executives. This in turn has the potential to influence financial behavior and cause corporations to be more likely to heed the concerns of the public and shareholders vis-à-vis executive pay.
