Aligning CEO Incentives with a Company's Long-Term Agenda

2 Pages Posted: 22 Oct 2011 Last revised: 23 Oct 2011

Date Written: October 22, 2011

Abstract

This commentary, a contribution to the Harvard Business Review Online Forum on the CEO's role in fixing the capitalist system, makes the argument that for an incentive system to usefully support a firm's long-term, society focused agenda, companies need to lessen their reliance on financial rewards to motivate top management, strengthen share-ownership requirements and stock-vesting conditions for senior executives and board members, and change CEOs' perception of compensation as a tool to "keep score" vis-à-vis their peers and bolster their own egos.

Keywords: Incentive System, Executive Compensation, Long-Term Capitalism

JEL Classification: G30, G34, M52

Suggested Citation

Wong, Simon C. Y., Aligning CEO Incentives with a Company's Long-Term Agenda (October 22, 2011). Harvard Business Review Online, October 2011. Available at SSRN: https://ssrn.com/abstract=1947638

Simon C. Y. Wong (Contact Author)

Northwestern University School of Law ( email )

375 E. Chicago Ave
Chicago, IL 60611
United States

London School of Economics

Houghton Street
London, WC2A 2AE
United Kingdom

HOME PAGE: http://www.lse.ac.uk/collections/law/staff/simon-wong.htm

Tapestry Networks ( email )

404 Wyman St.
Suite 225
Waltham, MA 02451
United States

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