Chapter 13
Excess or Excellence?
How to Clean Up the Managerial Compensation Mess
In This Chapter
- What exactly irks people about managers’ pay?
- How to link pay to long-term growth.
- The promise and perils of stock options.
- Designing effective and fair managerial compensation systems.
What is the major problem with executive compensation and the primary source of the persistent public resentment of corporate managers? A look at figures 13-1 and 13-2 will help you grasp the problem immediately. Figure 13-1 presents the mean total annual compensation of S&P 500 CEOs from 1992 through 2008 (top line) and their mean cash compensation (bottom line)—salary and bonuses. The difference between the two is largely the result of the equity-based compensation: ...
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