Author: Kim Peters (University of Exeter Business School)
Abstract: CEO pay is the news again. The early months of 2024 saw announcements of multi-million dollar pay packages, from the extraordinary ($100 million to the new Starbucks CEO) to the unimaginable ($56 billion to Elon Musk). These announcements are merely the most recent instances of a decades-long trend of escalating CEO pay — a pattern that is increasingly accompanied by questions around the impact of such high pay for other organizational members. In this talk, I will summarise a programme of work that draws on the social identity approach to shed light on the implications of a large vertical pay gap for employee relations and leadership effectiveness. Together, this work suggests that sizeable vertical pay gaps can foster organizational dysfunction and directly impair a CEO’s capacity to perform their core function: leading their organization.
Host: Claudia Peus