Business, Management and Accounting
4 years ago

New framework reveals if executive pay is too high or low

SSRN Electronic Journal
Is Pay Too High and are Incentives Too Low? A Wealth-Based Contracting Framework
John E. Core, Wayne R. Guay

Paper Summary

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The article discusses concerns about high executive pay and incentives after the financial crisis. It introduces a framework to determine the right level of performance-based incentives for executives, considering their pay and wealth. The framework highlights both the advantages and disadvantages of performance-based incentives.