Pay Without Performance: A Market Equilibrium Critique

Hubbard, R. Glenn

doi:10.2139/ssrn.868513

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Pay Without Performance: A Market Equilibrium Critique

8 Pages Posted: 12 Dec 2005

See all articles by R. Glenn Hubbard

R. Glenn Hubbard

Columbia University - Columbia Business School, Finance; National Bureau of Economic Research (NBER)

Date Written: December 2005

Abstract

This paper is based on the author's comments at the Columbia University Symposium on Bebchuk and Fried's "Pay without Performance: The Unfulfilled Promise of Executive Compensation." The paper offers the author's perspective on the book as well as a different view on two issues: first, the starkly drawn differences between the arm's length bargaining model versus the managerial power model; and, second, the authors' preference for reduced-windfall options over restricted stock.

Keywords: Executive compensation, pay without performance

JEL Classification: G30, J33, J44, K22

Suggested Citation: Suggested Citation

Hubbard, Robert Glenn, Pay Without Performance: A Market Equilibrium Critique (December 2005). Available at SSRN: https://ssrn.com/abstract=868513 or http://dx.doi.org/10.2139/ssrn.868513