The Case Against Executive Compensation

-There are arguments about investing more than a bare minimum amount of time on executive comp.
I have no doubt that the main driver of executive compensation programs is top management''s attempts to pay themselves more. The only outside controls on top management pay are exec comp consultants (who are often chosen by the CEO) and the board (who are often CEOs themselves)-all of which leads to programs designed mainly to increase pay.

Fancy incentive plans are often merely ways to disguise and justify excessive rewards.

To the extent this is true any further argument may be pointless. However, in the interests of debate I´d like to present some of the arguments against tinkering with executive compensation

Main Arguments
There is a strong argument for creating a simple executive compensation scheme and then just leaving it alone. This argument will likely be ignored because it is in the interests of top management, exec comp consultants and to some extent board members to continually tinker with, and increase, executive comp.

There are, of course, arguments in favor or tinkering with exec comp, which essentially revolve around aligning reward and behavior. These arguments are widely circulated and need no assistance from me.

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