[ExI] Restructuring executive compensation
pharos at gmail.com
Sat May 30 18:08:44 UTC 2009
On 5/30/09, Max More wrote:
> One factor that no doubt contributed to the problems is the way executive
> compensation has been incentivizing executives to take on excessive risk in
> pursuit of short-term gains. That is *not* inherent in the market system;
> it's a result of the specific compensation schemes used. Four authors have
> recently published a working paper suggesting a better compensation scheme.
> My review is here:
> "Dynamic Incentive Accounts"
Compensation schemes are fine until people get involved.
If a board wants to hire a specialist from a competitor and he says he
doesn't like their compensation package, what do you think will
How do you stop directors voting for each others' salary rises?
If a board wants to hire a top CEO, then he gets to specify whatever
he wants as a compensation package.
People are the problem, not the rules. Rules are made to be broken.
(And, boy, did they break them!).
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