Tuesday, November 11, 2008
Renumeration
Despite its retributive appeal, ex post facto civil punishments like making executives pay back bonuses do not conform with fair play. Would you want someone taking the salary you earned back from you just because the market tanked somewhere down the road? Perhaps, the government can require in future contracts certain clauses that indicate that bonuses are conditioned on long-term success of the company, not year-to-year performance fluctuations. That might also solve the incentive problem (maximizing share price as opposed to corporate strength) with granting officers options.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment