There seem to be two economic realities operating in our country today
With executive compensation you get what you pay for and you pay for what you get
If you make compensation all upside and no downside that will affect the executives assessment of risk. It will make it clear to him that he can easily offload the risk onto shareholders. It’s heads they win, tails we lose.
When companies fail to perform, should they give millions of dollars to their senior executives?
Most Americans live in a world where economic security is precarious and there are real economic consequences for failure. But our nation’s top executives seem to live by a different set of rules.