Monday, June 16, 2014
Executive Compensation And The Great Man Theory
This article, written by a member of corporate boards, understands how the executive compensation system works. She argues, however, that the growth in executive compensation is not fully explained by attributed it to weak corporate governance. She argues that CEO's are rewarded excessively because we have a culture that believes in the "myth of the great man". In particular, corporate CEO's who were not part of the great man culture, are now being rewarded for corporate achievements that are realized primarily by the work of large teams. We have turned many CEO's into rock stars, and we reward them accordingly. She provides many examples in this article.