A new book on executive compensation, Pay Without Performance is generating a good deal of interest.
Professor Bainbridge notes that the authors:
“forcefully contend that â€œmanagers have used their influence [over corporate boards of directors] to obtain higher compensation through arrangements that have substantially decoupled pay from performance.” In other words, the executive compensation scandal is not the rapid growth of management pay in recent years, as too many glibly opine, but rather the failure of compensation schemes to award high pay only for top performance. “
Professor Bainbridge is working on a review of this book in a forthcoming issue of the Texas Law Review.
Professor Ribstein also comments on this book in his excellent weblog.
Franklin Raines, who resigned as chief executive of Fannie Mae last week after the mortgage finance provider admitted to four years of extensive accounting abuse, will be paid $600,000 for the next six months and then receive an annual pension of $1.37m for the rest of his life.
Nice work if you can get (and lose) it.