IDEAS home Printed from https://ideas.repec.org/a/inm/orinte/v43y2013i6p593-595.html
   My bibliography  Save this article

The Ombudsman: Do CEOs’ Aspirations for Wealth Harm Stockholders?

Author

Listed:
  • Edward L. Deci

    (University of Rochester, Rochester, New York 14627)

  • Richard M. Ryan

    (University of Rochester, Rochester, New York 14627)

Abstract

Increasingly, high-level executives are rewarded not for effective behaviors but for certain outcomes such as stock prices. The primary problem with this prevalent approach, which often gives large sums to CEOs, is that it strengthens any behavior that appear to lead to the outcomes, including fraudulent ones. In addition, board members often have similarly compensated positions in their own companies; therefore, top executives and board members are likely to support each other in pursuit of high pay. However, research has shown that when people aspire to and attain greater wealth, they tend to display poorer psychological well-being and decreased performance. Such compensation tends to undermine intrinsic motivation, which can result in negative consequences for companies and their stockholders.

Suggested Citation

  • Edward L. Deci & Richard M. Ryan, 2013. "The Ombudsman: Do CEOs’ Aspirations for Wealth Harm Stockholders?," Interfaces, INFORMS, vol. 43(6), pages 593-595, December.
    • Handle: RePEc:inm:orinte:v:43:y:2013:i:6:p:593-595
    DOI: 10.1287/inte.2013.0707
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/inte.2013.0707
    Download Restriction: no
    File URL: https://libkey.io/10.1287/inte.2013.0707?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Philippe Jacquart & J. Scott Armstrong, 2013. "The Ombudsman: Are Top Executives Paid Enough? An Evidence-Based Review," Interfaces, INFORMS, vol. 43(6), pages 580-589, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Derek C. Jones, 2013. "The Ombudsman: Employee Ownership as a Mechanism to Enhance Corporate Governance and Moderate Executive Pay Levels," Interfaces, INFORMS, vol. 43(6), pages 599-601, December.
    2. J. Scott Armstrong & Philippe Jacquart, 2013. "The Ombudsman: Is the Evidence Sufficient to Take Action on Executive Pay? Reply to Commentators," Interfaces, INFORMS, vol. 43(6), pages 602-604, December.
    3. Martijn Hendriks & Martijn Burger & Harry Commandeur, 2023. "The influence of CEO compensation on employee engagement," Review of Managerial Science, Springer, vol. 17(2), pages 607-633, February.
    4. Wei Shi & Brian L. Connelly & Robert E. Hoskisson, 2017. "External corporate governance and financial fraud: cognitive evaluation theory insights on agency theory prescriptions," Strategic Management Journal, Wiley Blackwell, vol. 38(6), pages 1268-1286, June.
    5. Christopher S. Armstrong, 2013. "The Ombudsman: A Closer Look at the Efficiency of Top Executive Pay and Incentives," Interfaces, INFORMS, vol. 43(6), pages 590-592, December.
    6. Jeffrey Pfeffer, 2013. "The Ombudsman: Evidence and Executive Compensation—Like Trains Passing in the Night? An Introduction to “Are Top Executives Paid Enough?”," Interfaces, INFORMS, vol. 43(6), pages 578-579, December.
    7. Robin M. Hogarth & Gueorgui I. Kolev, 2013. "The Ombudsman: The “Wicked” Environment of CEO Pay," Interfaces, INFORMS, vol. 43(6), pages 596-598, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:orinte:v:43:y:2013:i:6:p:593-595. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.