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The ethical implications of the straight-commission compensation system — An agency perspective

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Abstract

This paper examines the role of the straight-commissioned salesperson in the context of agency theory and asserts that because the agent acts to benefit two principals, potential conflicts of interest arise. Temporal differences in receipt of rewards create a major conflict, while the firm's exhibition of both espoused and actual behaviors and information asymmetries intensify this conflict. Finally, in light of these inconsistencies, the ethical implications of the straight-commission compensation system are examined.

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Authors and Affiliations

  1. Katz Graduate School of Business, University of Pittsburgh, 15260, Pittsburgh, PA, USA

    Nancy B. Kurland

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  1. Nancy B. Kurland
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Additional information

Nancy Kurland is a doctoral student at the Katz Graduate School of Business of the University of Pittsburgh. She has had extensive experience as a straight-commissioned salesperson, including her most recent position as an investment broker for a major Wall Street firm.

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Kurland, N.B. The ethical implications of the straight-commission compensation system — An agency perspective. J Bus Ethics 10, 757–766 (1991). https://doi.org/10.1007/BF00705710

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