Monthly Archives: May 2009

Wharton B School: Executive Pay is Broken

Wharton finance professor Alex Edmans and a group of colleagues propose linking an executive’s compensation to the performance of the firm over a longer horizon.  The model resembles the idea outlined in previous posts of this blog: Regulate executive pay in the financial sector by linking it to the long term performance of key employment and average pay indicators of the U.S. economy as a whole.  This way bankers will be motivated to lend, invest and borrow so that somehow employment and average pay for everyone are increasing over time.

You can read the full blog post from the Knwoledge Wharton blog here