Executive compensation

The country’s recent reforms don’t go nearly far enough.

The gap between CEO compensation and that of the average worker continues to grow at an astounding rate. According to the Institute for Policy Studies, CEO compensation in the United States was approximately 40 times greater than that of the average worker in 1960 and is now over 400 times greater (a much larger gap […]

By aligning executives' financial incentives with company strategy, a firm can inspire its management to deliver superior results. But it can be hard...

We have ‘80s corporate raiders to thank.

It’s up to shareholders, not politicians, to make change happen.

Let’s put aside that executive compensation debate for a moment and consider instead what Sreedhari Desai is studying. Does sky-high pay lead to worse treatment of workers? Does it make leaders, literally, meaner? Desai says the answer is yes. “Increasing executive compensation results in executives behaving meanly toward those lower down the hierarchy” she writes […]

This post is in three parts. Parts I and II were originally posted on May 5, and they are titled, respectively, The Ideal and The Deal. Part III, which appears here for the first time, is titled The Real. The extreme income gap between chief executive officers and nearly everyone else has a corrosive effect. […]

Stephen Davis is the coauthor of The New Capitalists: How Citizen Investors Are Reshaping the Corporate Agenda. There is a cutting edge to corporate leadership, but you won’t find it at Blockbuster. Here is a board of directors that knew going into its 2007 annual meeting that share-owners were at a boiling point — over […]

Anecdotal evidence is at odds with the data.

New research refines a theory from the 1990s, demonstrating that equity pay can both encourage and discourage executive risk taking. It depends on the...

Past economic crises curbed executive compensation - but only temporarily. Companies continue to shell out hefty sums, even when performance is poor.

Wall Street may have ignited the outrage over executive compensation, but it's now affecting all public companies. Believing that corporate pay practices...

It seems we are moving from an era when “greed was good” to one in which “jealousy is justified”–the executive-compensation regulations being considered now by the government and advocated by shareholder activists aren’t very thoughtful, and I believe they’re born out of jealousy and misinformation. But “How much should CEOs be paid?” is the wrong […]

Executive pay is making people’s blood boil. No one is neutral about it. When President Obama last night said, “I will not spend a single penny for the purpose of rewarding a single Wall Street executive,” I could almost hear millions cheering across the country, but also thousands of executives–and aspiring executives–snorting in exasperation at what could be seen as a backlash against […]

As the global economy vacillates between signs of recovery and omens of collapse, businesses and governments are clamping down. But the world doesn't...

Investors should provide money, information, and discipline. They often fall short.

Their salaries are typically lower than male founders’.

If we want to make any meaningful headway on improving executive compensation practices, we have to first go back to principles: compensation should provide...

For some time now, CEO pay has been a lightning rod for criticism and debate, but CEOs themselves have stayed pretty quiet on the topic—often because it’s uncomfortable for us to speak out about how others are paid and simpler to leave it to our compensation committees. Our well-intentioned advisers—HR leadership, outside consultants and lawyers, […]

It’s about communicating a long-term, ambitious vision to shareholders.