Comments on: The Great Man Theory and Executive Compensation http://www.providedhowever.com/blog/2009/05/the-great-man-theory/ Issues encountered by corporate lawyers Thu, 18 Jun 2009 22:27:12 -0600 hourly 1 By: Doug Cornelius http://www.providedhowever.com/blog/2009/05/the-great-man-theory/comment-page-1/#comment-4 Doug Cornelius Wed, 06 May 2009 17:10:34 +0000 http://www.providedhowever.com/blog/?p=58#comment-4 We always heap credit on the leaders for the success of their organizations and blame them for their failings. Take football as an example. The quarterbacks get more of the glory and more of the blame. The cameras are on them. The cameras do not see that the receiver was out of position. Personally, since they will get more of the blame, I think there should be some extra reward for it. They key is aligning awards to the long term success of the organization and recognizing the value. One idea that has been floated was aligning bonuses based on performance against peers instead of against the stock price itself. If the company outperforms its peers, there is a reward. Even if that is a negative return. On the other side, a reward is paid on an increase only if the increase outperforms its peers. We always heap credit on the leaders for the success of their organizations and blame them for their failings.

Take football as an example. The quarterbacks get more of the glory and more of the blame. The cameras are on them. The cameras do not see that the receiver was out of position.

Personally, since they will get more of the blame, I think there should be some extra reward for it. They key is aligning awards to the long term success of the organization and recognizing the value.

One idea that has been floated was aligning bonuses based on performance against peers instead of against the stock price itself. If the company outperforms its peers, there is a reward. Even if that is a negative return. On the other side, a reward is paid on an increase only if the increase outperforms its peers.

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