Skip to main content
News

Economic researcher Ann-Christine Schulz comments on manager salaries and bonuses in „Zeit im Bild“

August 25, 2020

FH-Prof. Dr. Ann-Christine Schulz, scientist in the field of corporate strategy and corporate governance at the Institute for Business Ethics and Sustainable Strategy (IBES) of the FHWien of the WKW, was interviewed for Zeit im Bild of 24.8.2020 on manager salaries and bonus payments. In connection with the state aid to companies resulting from Covid 19, there has been increasing discussion in recent weeks about the payment of annual bonuses, most recently in association with Austrian Airlines (AUA).

Ann-Christine Schulz im Interview in der ZIB
(C) ORF

High bonus payments to members of the board of directors of listed companies, who on average often earn more than 50 times their employees, also cause a stir in normal times. However, if the companies take advantage of state aid and are thus supported by taxpayers’ money – as in the case of the AUA – this increases social and media attention. For this reason, the ORF has researched how other companies deal with bonus payments for their board members.

In the course of the research, FH-Prof. Dr. Ann-Christine Schulz was asked about a scientific perspective. “High salaries for board members are justified, among other things, by the fact that there are very few executives who have the appropriate skills to run a large company. Companies therefore have no interest in losing these capable top managers,” explains Schulz.

Damage to reputation through high bonuses in times of crisis

In a scientific study of U.S. companies, FH-Prof. Dr. Ann-Christine Schulz and her co-author Miriam Flickinger (FU Berlin) examined the influence of excessive pay of board members on the company’s reputation. The results show that overpayment in special performance-related components (e.g. stock options) can be reputation-damaging. These correlations are reinforced in situations where companies are exposed to increased general attention.

Even if companies, such as AUA, claim to repay manager bonuses after widespread protest, it is highly probable that high bonuses have already damaged their reputation during the crisis.

FH-Prof. Dr. Ann-Christine Schulz researches at the Institute for Business Ethics and Sustainable Strategy (IBES). The IBES at FHWien der WKW is particularly concerned with business ethics, sustainability management and strategy. Urgent issues of ecologically, economically and socially sustainable corporate management are researched against the background of current challenges such as globalization, climate change and digitization. The activities of the IBES include research, teaching and transfer into practice. The research contributes to the scientific discourse through publications in top-class journals. The research results are incorporated into teaching at the WKW’s Vienna University of Applied Sciences, thus benefiting the students. The IBES is also characterized by its close cooperation with the practice. For example, issues are examined together with companies and other partners such as governmental and non-governmental organizations.

You can find the ZIB contribution here. 

An article of the Salzburger Nachrichten with contributions of among others FH-Prof. Dr. Ann-Christine Schulz and FH-Prof. Dr. Markus Scholz you can find here.

Further information: https://link.springer.com/article/10.1007/s11846-018-0305-0