Johnson, Organizational Ethics 3e, © 2015 – Instructor Resources
Case Study 8.1
CEO Compensation: The Sky’s the Limit
Case Synopsis and Analysis
CEO compensation has reached an all time high, rebounding from the Great Recession. At the
same time, the pay of the average worker has not kept pace. Several factors are behind soaring
CEO pay packages, including rising stock prices, fear of losing top talent, and the desire of
CEOS to be paid as well as their colleagues. While supporters argue that CEOS are worth every
penny they earn, critics of CEO pay point out that most top executives are promoted from within.
As a result, companies have no reason to pay exorbitant salaries to keep their leaders from being
hired away by other firms. Benchmarking compensation to other companies leads to increases as
boards raise executive pay to keep up with comparison firms. So far efforts to curb CEO pay
have largely been ineffective.
Rising CEO pay is ongoing evidence of the challenge of privilege. The gap between what
leaders and followers earn is larger than ever and is likely to grow still further.
Learning Objectives
*Students will take and defend a stance on the issue of executive pay.
*Students will develop strategies to address the CEO-worker pay gap.
Discussion Guide
Case Study 8.2
Failing to Serve Those Who Served
Case Synopsis and Analysis
To hide long wait treatment times for veterans, managers at the Veterans Health Case system
created sham wait lists. An estimated 100,000 veterans were kept off of official waiting lists or
not scheduled for treatment. Some patients may have died while waiting to see a doctor. The
falsified records enabled VA managers to receive bonuses. The former VA director resigned and
the new director took steps to change the organization’s culture.
Johnson, Organizational Ethics 3e, © 2015 – Instructor Resources
VA medical officials lost sight of the fact that they are to serve the needs of veterans and the
medical personnel who treat them. Rooting out corruption will require changing the culture of
the VA.
Learning Objectives
*Students will identify the failures of VA leadership.
*Students will develop steps and strategies to prevent future corruption at the VA.
Discussion Guide
Case Study. 8.3
Leading in the Darkness and the Light
Case Synopsis and Analysis
Thirty-three Chilean miners were rescued in 2010 due to inspirational leadership both above and
below ground. Chile’s president, mining minister and others kept the rescue effort going even
when the chances of recovery grew dim. They turned to other governments and businesses for
help. The miners, who spent 69 days trapped after a rock collapse, organized themselves and
assisted their rescuers. Sadly, the disaster didn’t bring improvements in mine safety and the
survivors are largely destitute.
Both the rescuers and miners demonstrated ethical leadership during the crisis. The rescue was a
moment of worldwide celebration. However, the aftermath of the disaster suggests that leaders
have extended obligations to crisis victims.
Learning Objectives
*Students will apply normative leadership theories to the actions of miners and rescuers.
*Students will identify the long-term obligations of leaders to the victims of disasters.
Discussion Guide
Johnson, Organizational Ethics 3e, © 2015 – Instructor Resources