Category Archives: Organizational Ethics

Nonprofit Executive Compensation: How Much is Too Much?

The Climate of Executive Compensation

In recent years, a great deal of scrutiny has been placed on corporate executives who enjoy lavish salaries and benefits packages, even in times of great economic turmoil.  For instance, in a 2009 article for The New York Times, Mark Hulbert references the work of two Harvard Law School professors — Lucian A. Bebchuk and Holger Spamann — as he writes: “… [C]ompensation for bank C.E.O.’s is asymmetrical … they often stand to make much more money when their banks succeed than they could lose if their banks fail.” 1,2 In light of this statement, it seems hardly surprising to note that executives from large investment banking firms such as Goldman Sachs, Merril Lynch & Co. and Citigroup Inc. reported multi-million dollar salaries during the sub-prime mortgage crisis that began in 2007, even as many Americans were losing their homes and facing other economic hardships.  As an example, the former C.E.O. of Citigroup, Chuck Prince, received a $10.4 million cash bonus for 2007.3

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