Debate: Executive-pay caps

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Are executive-pay caps ever justified?

Background and context

With the 2008 and 2009 financial crisis, a large debate has arisen regarding the government regulating and capping executive pay, particularly in instances where the government "bails-out" a company. While one debate surrounds simply the extent or degree of the executive pay cap, a more fundamental debate surrounds whether pay caps of any kind are ever justified. Many, usually conservative, groups argue that it is never justified.

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Pro

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Con

• Executive-pay caps disrupt the free market. This may be an obvious argument but it still holds merit nonetheless. The fact of the matter is that any sort of executive-pay cap would require governmental enforcement, and while government intervention is necessary from time to time, corporations must still be free to conduct business how they feel appropriate. The reason that business and economies thrive is that because they are free to make decisions. These decisions allow for a sort of economic survival of the fittest where the best companies stay afloat, and the worst fail. This cannot happen with government intervention, even in the form of pay caps. It's not the government's job to deal with this, because as Henry David Thoreau once famously said, "That government is best which governs least."

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Pro

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Con

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Pro

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Con

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See also

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