If You're So Ethical Why Are You So Highly Paid? Market Failure in Executive Pay

Hosted by LSE Press

Online and in-person public event (Sheikh Zayed Theatre, New Academic Building)


Dr Eva Micheler

Professor Sandy Pepper

Professor Alex Voorhoeve

This event is relevant for anyone concerned to understand and tackle business’s role in the growing social inequality of advanced economies in an informed, fair and feasible way.

Over the last 30 years senior executive pay in the USA, UK and many other developed countries has increased dramatically, generating enormous debate and, at times, public and political outrage. Sandy Pepper’s book argues that this ‘soaraway’ inflation in executive pay is the result of a market failure that has lead remuneration committees to become trapped in a prisoner’s dilemma – where they feel they must recommend over-the-odds payments in the vain hope of obtaining or retaining superior talent. For institutional investors too, these developments have created a collective action problem, with many historically unwilling or unable to intervene to curtail excessive corporate executive pay. Combatting this ‘market failure’ approach to executive pay ultimately requires a stronger, reformed ethical response from investors, companies, and executives – but what solutions are feasible? 

Meet our speakers and chair

Eva Micheler (@EMicheler) studied law at the University of Vienna and at the University of Oxford before joining LSE Law School in 2001. She is an Associate Professor in Law at the London School of Economics and Political Science and an ausserordentlicher Universitätsprofessor at the University of Economics in Vienna, where she took Habilitation in 2003. Professor Micheler is also on the management committee of the Systemic Risk Centre at LSE.

Alexander (‘Sandy’) Pepper is Emeritus Professor of Management Practice at LSE, where he has been teaching and researching since 2008. Prior to this he had a long career at PricewaterhouseCoopers. Sandy is one of the UK’s recognised experts on executive pay. He is the author of several academic articles and books on the subject, including Senior Executive Reward – Key Models and PracticesThe Economic Psychology of Incentives, and Agency Theory & Executive Pay.

Alex Voorhoeve is Professor in the Department of Philosophy, Logic and Scientific Method at the London School of Economics and Political Science. He has held visiting positions at Harvard (2008-09), Princeton (2012-13) and the National Institutes of Health, U.S. (2016-17). His research covers decision theory, moral psychology, and the theory and practice of fair distribution, with particular application to the allocation of resources for health.

More about this event

This event forms part of LSE’s Understanding the UK Economy series, showcasing research and expertise on the state of the UK economy and its future.

LSE Press (@LSEPress) is the LSE’s book and journal publishing arm.

Twitter Hashtag for this event: #LSEUKEconomy

LSE Blogs

Many speakers at LSE events also write for LSE Blogs, which present research and critical commentary accessibly for a public audience. Follow British Politics and Policy, the Business Review, the Impact BlogEuropean Politics and Policy and the LSE Review of Books to learn more about the debates our events series present.

Live captions

Automated live captions will be available at this webinar. Once you join the Zoom webinar, you will be able to show or hide the subtitles by clicking on the “Live Transcript - CC” button, from where you can also change the font size and choose to view the full transcript. Please note that this feature uses Automatic Speech Recognition (ASR) technology, or machine generated transcription, and is not 100% accurate.


Photographs are regularly taken at LSE events both by LSE staff and members of the media. Photographs from events taken by LSE staff are often used on LSE's social media accounts.


We aim to make all LSE events available as a podcast subject to receiving permission from the speaker/s to do this, and subject to no technical problems with the recording of the event. Podcasts are normally available 1-2 working days after the event. Podcasts and videos of past events can be found online.

Social Media

Follow LSE public events on Twitter for notification on the availability of an event podcast, the posting of transcripts and videos, the announcement of new events and other important event updates. Event updates and other information about what’s happening at LSE can be found on the LSE's Facebook page and for live photos from events and around campus, follow us on Instagram. For live webcasts and archive video of lectures, follow us on YouTube

LSE in Pictures is a selection of images taken by the school photographer.


If you are planning to attend this event and would like details on how to get here and what time to arrive, as well as on accessibility and special requirements, please refer to LSE Events FAQ.  LSE aims to ensure that people have equal access to these public events, but please contact the events organiser as far as possible in advance if you have any access requirements so that arrangements, where possible, can be made. If the event is ticketed, please ensure you get in touch in advance of the ticket release date. Access Guides to all our venues can be viewed online.

WIFI Access

LSE has now introduced wireless for guests and visitors in association with 'The Cloud', also in use at many other locations across the UK. If you are on campus visiting for the day or attending a conference or event, you can connect your device to wireless. See more information and create an account at Join the Cloud.
Visitors from other participating institutions are encouraged to use eduroam. If you are having trouble connecting to eduroam, please contact your home institution for assistance.
The Cloud is only intended for guest and visitor access to wifi. Existing LSE staff and students are encouraged to use eduroam instead.
From time to time there are changes to event details so we strongly recommend that if you plan to attend this event you check back on this listing on the day of the event.
How can I attend? Add to calendar
This public event is free and open to all. This event will be a hybrid event, with an in-person audience and an online audience. 

For the online event: Registration for this event on Zoom will open after 10am on Monday 31 October.

For the in-person event: No ticket or pre-registration is required. Entry is on a first come, first served basis. For any queries see LSE Events FAQ.

For any queries email

This event will be streamed live on YouTube.


LSE Events LSEpublicevents

RT @LSE_TII: @DanielPink joined @profgracelordan to discuss The Power of Regret. Here is a 🧵 with some key takeaways: The “no regrets” man…

2 days ago

Reply Retweet Favorite

LSE Events LSEpublicevents

Have you checked out our new events leaflet yet? It has details of public events from Sept-Dec featuring events wit……

2 days ago

Reply Retweet Favorite

  Sign up for news about events