Wednesday, 24 June 2009

How to pay executives? part 2

With regard to the previous posting How to pay executives?, this comes from the Economist article The Jack Welch MBA,
One extremely popular class would be “Maximising Your CEO Pay”. This columnist once heard Mr Welch tell a chief executives’ boot-camp that the key was to have the compensation committee chaired by someone older and richer than you, who would not be threatened by the idea of your getting rich too. Under no circumstances, he said (the very thought clearly evoking feelings of disgust), should the committee be chaired by “anyone from the public sector or a professor”.
I guess that means Professors Edmans and Gabaix are out then.

And there is the Dogbert approach to CEO pay.

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