Alex Edmans wrote in the WSJ, How to Fix Executive Compensation. "There are creative ways—yet simple and easy to implement—to tie executives' fortunes to the long-term health of their companies. Tying bosses' pay to the levels of debt at the business, for instance, will dissuade them from taking risks that might alienate creditors. Preventing executives from selling company stock until several years after it's granted will give them a powerful incentive to think long term. And updating the compensation package to reflect changing conditions in the market and the company will ensure that managers' interests are always aligned with those of the company and its shareholders."
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