Boston University School of Law
Questions about the pay of public company executives – and, specifically, the structure of that pay – continue to dominate discussions regarding U.S. corporate governance. These concerns have been amplified by the recent financial meltdown. Some commentators suggest that the aggressive structure of executive pay packages – the heavy reliance on stock options – may have led to excessive risk taking at financial institutions that contributed to the collapse. Others have argued that incentive compensation has become a fetish in corporate America and that the heavy reliance on performance-based pay is no longer justified. More generally, Professor Frankel argues that public company executives are paid more like owners than fiduciaries, but unlike most owners, corporate executives enjoy too much upside reward for the downside risk that is imposed upon them.
David I. Walker,
Executive Pay Lessons from Private Equity
Boston University Law Review
Available at: https://scholarship.law.bu.edu/faculty_scholarship/1632