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
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: Suggested Citation