Here’s a radical idea for reforming executive compensation: Pay executives only in cash. Ditch the equity.
You object: “But without equity, they won’t think like owners.” To me, that’s a feature, not a bug. Managers should think like managers. Owners should think like owners. Things get confused when we expect our managers to think like owners [...]
Category Archives: Executive Compensation
The Cash-Only Comp Plan
Posted in Executive Compensation Comments closed
Parachutes: The Golden, the Fool’s Gold and the Foolish
A few things about golden parachutes bother me:
1. The term. The term “golden parachute” is intended to convey a certain cushy lavishness. In fact, it makes no sense. A parachute made of gold will drop like a lead balloon. With a golden parachute, you won’t get a soft landing, you’ll plummet to a bone-crushing [...]
Posted in Executive Compensation Comments closed
My Say on Say on Pay
It is all but certain that Senator Schumer’s forthcoming Shareholder Bill of Rights will include a say on pay requirement and, I assume, it is all but certain that a say on pay requirement will be passed into law.
Whether say on pay should be the law of the land is an interesting issue that, I [...]
Posted in Executive Compensation Comments closed
The Great Man Theory and Executive Compensation
“The history of the world is the biography of great men.” That statement by Thomas Carlyle, a nineteenth century historian, embodies the Great Man Theory of history, in which historical events are explained by the people who led them.
These days, professional historians shun the Great Man Theory of history. Instead, they focus on the social, [...]
Posted in Executive Compensation Comments closed