
What You Should Do about Executive Incentives
£8.90
Abstract: Most large organizations offer their senior executives compensation packages that include some element of ‘pay-for-performance’. The underlying assumption is that these align the interests of their executives with those of the shareholders. But the evidence is tenuous at best. This paper examines this evidence and suggests a number of ways that boards can design schemes that reward longer-term performance while minimizing the toxic effects of these schemes.