What does this research mean for the field?

Modifying the corporate objective of shareholder wealth maximization to compensate laid-off employees with company shares ensures shareholder gains while protecting employees, resulting in a Pareto Improvement in social welfare. Novelty: ClaimNovelty.CONTRADICTORY. Consensus alignment: ConsensusAlignment.CHALLENGES_CONSENSUS.

What question did this study set out to answer?

To evaluate the moral foundations of shareholder wealth maximization during corporate layoffs and propose a modified objective function that enhances overall social welfare.

August 27, 2026Business & SocietyOpen Access

Modifying the Corporate Objective to Improve Social Welfare: The Case of Employee Layoffs

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To evaluate the moral foundations of shareholder wealth maximization during corporate layoffs and propose a modified objective function that enhances overall social welfare.
Applied utilitarian moral philosophy and welfare economics principles to evaluate traditional shareholder wealth maximization (SWM).
Modeled a modified corporate objective incorporating negotiated equity-based compensation packages for laid-off employees across large firms.
Standard shareholder wealth maximization fails to reliably generate net positive social welfare outcomes during employee downsizing.
Allocating negotiated company shares to laid-off personnel reliably preserves shareholder returns while preventing employee welfare loss, resulting in a Pareto improvement.
A conceptual roadmap demonstrates how this equity-compensation model can extend to non-shareholder stakeholders across broader corporate governance contexts.

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Implication

Theoretical analysis demonstrates that compensating laid-off workers with negotiated company shares achieves Pareto improvements in corporate restructuring, suggesting a viable framework for...

Cite This Study

Thomas M. Jones (2026) studied this question.

synapsesocial.com/papers/6a8fe9b910c91c1e926218ac https://doi.org/10.1177/00076503261476515

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Implication

Theoretical analysis demonstrates that compensating laid-off workers with negotiated company shares achieves Pareto improvements in corporate restructuring, suggesting a viable framework for...

Modifying the Corporate Objective to Improve Social Welfare: The Case of Employee Layoffs

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Cite This Study

Modifying the Corporate Objective to Improve Social Welfare: The Case of Employee Layoffs

Key Points

Discussion

Implication

Cite This Study

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