Home | Databases | WorldLII | Search | Feedback Edited Legal Collections Data

Wells, Harwell --- "U.S. Executive Compensation in Historical Perspective" [2012] ELECD 600; in Thomas, S. Randall; Hill, G. Jennifer (eds), "Research Handbook on Executive Pay" (Edward Elgar Publishing, 2012)

Book Title: Research Handbook on Executive Pay

Editor(s): Thomas, S. Randall; Hill, G. Jennifer

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781849803960

Section: Chapter 2

Section Title: U.S. Executive Compensation in Historical Perspective

Author(s): Wells, Harwell

Number of pages: 17

Extract:

2 U.S. executive compensation in historical
perspective
Harwell Wells* 1




1 INTRODUCTION
To understand executive compensation we must understand its history. That history is
surprisingly long; for almost a century Americans have fought over how much, and how,
those who run giant corporations should be paid. It sweeps broadly, for questions of
executive compensation are tied not only to issues of internal corporate governance but
to the evolution of the U.S. industrial system, corporate disclosure and privacy, the tax
system, the balance of power in the national political economy, international economic
competitiveness, and Americans' basic intuitions of fairness and justice. And it is illumi-
nating. The history of executive compensation does not merely provide colorful anec-
dotes or a backdrop to current debates; it is essential to understanding today's executive
compensation.
The history breaks into three parts: (1) the origins of modern executive compensation
in the decades before World War II, during which executive compensation developed
and, in the 1930s, first attracted national attention; (2) the postwar period from the 1940s
to the 1970s, when executive compensation's growth slowed and it receded as a major
public issue; and (3) the current phase, beginning in the mid-1970s, when it began to grow
at a faster clip even as average workers' wages stagnated, and so again became a focus
for public outrage and new debates over how the giant corporation is to be governed.
This chapter cannot hope to address all issues raised by the development of ...