How limiting CEO pay can be more effective, less costly
UNIVERSITY OF CALIFORNIA, BERKELEY'S HAAS SCHOOL OF BUSINESS -CEOs make a lot of money from incentive pay tied to stock performance. Although such schemes help align executives' interests with shareholders, they are not necessarily the best schemes as compared to schemes that rely on trust between board and executives.
"Ironically, the necessary trust is easier to establish when the alternative of using stock-based pay is less powerful. Our research found that government-imposed limits on contingent compensation make stock-based pay a worse alternative, facilitating superior ...



