The Golden Mean and the Problem of Executive Compensation

by Jordan J. Ballor • January 25, 2011

There was a good deal of discussion in the media over “unfair” executive compensation, especially in light of the bonuses, golden parachutes, and other forms of remuneration received by CEOs during the bailout.

I have yet to hear much complaint about CEOs being underpaid, though.

But this might change as it becomes apparent that under-compensation of executives might well be a way to wriggle out of higher payroll tax liability. Consider the case of CPA David Watson, who “incurred the wrath of the IRS by only paying himself $24,000 a year and declaring the rest of his take profit.” The Slashdot piece makes the compelling conceptual connection between Watson’s case and that of “the much ballyhooed $1 Executive club like Steve Jobs, Larry Ellison, Sergey Brin, Larry Page, and Eric Schmidt.”

The outcome of this? According to a WSJ overview of the Watson case, “Pay can vary—but it can’t be too low.”

I think if we follow the golden rule we’ll get a golden mean for the golden parachute so that it won’t strangle the golden goose.

Jordan J. Ballor

Jordan J. Ballor (Dr. theol., University of Zurich; Ph.D., Calvin Theological Seminary) is director of research at the Center for Religion, Culture & Democracy, an initiative of the First Liberty Institute. He has previously held research positions at the Acton Institute and Vrije Universiteit Amsterdam, and has authored multiple books, including a forthcoming introduction to the public theology of Abraham Kuyper. Working with Lexham Press, he served as a general editor for the 12 volume Abraham Kuyper Collected Works in Public Theology series, and his research can be found in publications including Journal of Markets & Morality, Journal of Religion, Scottish Journal of Theology, Reformation & Renaissance Review, Journal of the History of Economic Thought, Faith & Economics, and Calvin Theological Journal. He is also associate director of the Junius Institute for Digital Reformation Research at Calvin Theological Seminary and the Henry Institute for the Study of Christianity & Politics at Calvin University.

Related posts