Out-of-control executive compensation schemes are “widespread, persistent, and systemic,” and new reforms won’t clean up the mess, argue law professors Lucian Bebchuk and Jesse Fried. Q&A and book excerpt.
by Mallory Stark
In the new book Pay Without Performance: The Unfulfilled Promise of Executive Compensation, Lucian Bebchuk and Jesse Fried make the case that the executive compensation system in the U.S. is fundamentally broken. We like to think that executive pay is the product of arm's-length negotiation, that the executive bargains in his or her own best interest, while the board of directors bargains for the best interests of the shareholders. Bebchuk and Fried argue that, in fact, soaring executive pay is the result of management power.
Complete article at HBR
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