An important qualifi cation on this theory is that high execu- tive salary needs to result in a benefi t to the society for it to be justifi ed in terms of consequentialist ethics. Increased returns to the fi rm are not suffi cient. Increased effi ciency for the fi rm is a potential justifi cation, but the effi ciency must increase social utility either directly or indirectly. Th is means that the corporation must not be engaged in a legal but socially harmful activity. Improved effi ciency for a corporation engaged in.
