The Quest for Moral Leaders

The Quest for Moral Leaders

Essays on Leadership Ethics

New Horizons in Leadership Studies series

Edited by Joanne B. Ciulla, Terry L. Price and Susan E. Murphy

The quest for moral leaders is both a personal quest that takes place in the hearts and minds of leaders and a pursuit by individuals, groups, organizations, communities and societies for leaders who are both ethical and effective. The contributors to this volume, all top scholars in leadership studies and ethics, provide a nuanced discussion of the complex ethical relationships that lie at the core of leadership.

Chapter 5: Oh Lord, Won't You Buy Me a Mercedes Benz: how compensation practices are undermining the credibility of executive leaders

Jay A. Conger

Subjects: politics and public policy, leadership

Extract

5. “Oh Lord, Won’t You Buy Me a Mercedes-Benz”: how compensation practices are undermining the credibility of executive leaders Jay A. Conger The singer Janis Joplin penned a song entitled “Oh Lord, Won’t You Buy Me a Mercedes Benz” in which she playfully implores God to provide her with a number of the extravagant niceties in life. There is a striking parallel between the attitude and desire conveyed in this song and those of executives of America’s publicly traded corporations when it comes to their own compensation. For more than a decade, the news headlines have highlighted the fact that executives have been largely successful in getting most of what they want: “Crony Capitalism,” “A Decade of Executive Excess: The 1990s,” and “CEO Compensation: Time for Reform.” These headlines and their stories chronicle a trend in the business world to reward senior business leaders with excessive levels of compensation. For example, the median CEO compensation of a majority sample of Fortune 500 companies in 2003 was $7.1 million. Those in the Fortune 100 averaged $12.2 million. In 2002, the average US CEO earned 282 times what the average employee did. This compares to a ratio of 42 to one in 1980.1 But these are average figures. At the extreme end of the spectrum, there is Larry Gulp, CEO of Danaher, who received $53 million in 2003 compensation or Steve Jobs, CEO of Apple Computer, who took home $74.8 million.2 In essence, compensation at the top continues to be excessive and...

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