Alexander Pepper

Alexander (Sandy) Pepper (born 1958) is a management scholar, academic and emeritus professor of Management Practice at the London School of Economics and Political Science (LSE). His research focuses on senior executive pay, corporate governance, behavioural economics, and the theory of the firm. He is known for his book If You’re So Ethical, Why Are You So Highly Paid? Ethics, Inequality and Executive Pay. Currently he is a chair of Governing Body at the University of Portsmouth.

Education and career Pepper studied at Durham University before qualifying as an accountant with Coopers & Lybrand. He later undertook further study at Oxford University and HEC Paris and completed his Doctorate in Business Administration at the University of Surrey.

Pepper worked for PwC for 27 years, eventually becoming Joint Global Leader of the firm's Human Resource Services consulting practice. Following his retirement, he was appointed emeritus Professor of Management Practice at LSE. He also serves as Chair of the Governing Body at the University of Portsmouth.

Research and contributions Pepper's research focuses on organizations and management theory, with central interests in the theory of the firm, corporate governance, business ethics, and the determinants and consequences of executive pay.

A major contribution is his development of behavioural agency theory (BAT), formulated as both a critique and an extension of classical agency theory. Traditional agency theory (Jensen & Meckling, 1976) assumes rational, utility-maximizing, risk-averse agents, Pepper argues that these assumptions fail to account for how individuals actually behave in organisational contexts.

In his later research, Pepper applies concepts from institutional sociology to explain the persistent escalation of executive pay. Drawing on the framework of isomorphism, he argues that pay inflation is not merely the result of individual board decisions but emerges from broader systemic pressures. Together, these mechanisms create what Pepper describes as a “market failure” in executive pay: a self-reinforcing arms race in which each firm attempts to match or exceed others, driving compensation levels steadily upward.

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