Posts Tagged ‘ Compensation ’

This past week, it seems as though everyone in America from the president on down has a strong opinion about those AIG, Merrill Lynch, and Fannie Mae bonuses. “Outrage” has become the word du jour.

The public’s furor over AIG and the others will subside. But enhanced scrutiny of executive compensation, by regulators and shareholders, may not – even for companies that aren’t imploding or finding the federal government as their biggest shareholder. Fed Chairman Ben Bernanke is urging companies to align executive incentives with corporate goals, and avoid “mismatches between the rewards and risks borne by institutions or their managers.” And Simon Johnson, a professor at MIT’s Sloan School of Management and former chief economist of the International Monetary Fund recently wrote that “offering guaranteed [retention] bonuses to virtually the entire operation is hardly the way to achieve the desired results. We should not let people think that the best way to guarantee job security is to lose lots of money in a really complicated way.”

Smart boards and CEOs, rather than hunkering down (more…)