Pay without Performance: The Unfulfilled Promise of Executive Compensation
The company is under-performing, its share price is trailing, and the CEO gets…a multi-million-dollar raise. This story is familiar, for good reason: as this book clearly demonstrates, structural flaws in corporate governance have produced widespread distortions in executive pay. Pay without Performance presents a disconcerting portrait of managers’ influence over their own pay–and of a governance system that must fundamentally change if firms are … [ Read more ]
Content: Book | Authors: Jesse Fried, Lucian A. Bebchuk | Subject: Corporate Governance
Executive Compensation as an Agency Problem
This paper provides an overview of the main theoretical elements and empirical underpinnings of a “managerial power” approach to executive compensation. The managerial power approach recognizes that boards of publicly traded companies with dispersed ownership do not bargain at arms’ length with managers, and that managers are able to influence their own pay arrangements. It thus views executive compensation not only as an instrument for … [ Read more ]
Content: Article | Authors: Jesse Fried, Lucian A. Bebchuk | Subjects: Corporate Governance, Finance