Executive Compensation Debate

I would like to call everyone’s attention to a formal online debate concerning executive compensation which began on Tuesday, October 20 and is scheduled to conclude on October 30th.  Later in the semester, we’ll discuss how to structure compensation to align incentives between owners and managers of firms.  However, this debate, which is sponsored by The Economistaddresses the ongoing public controversy concerning whether senior executives are worth what they are paid. 

Specifically, the motion reads as follows: “This house believes that on the whole, senior executives are worth what they are paid.”  The person defending the motion is Steven N. Kaplan, who is the Neubauer Family Professor of Entrepreneurship & Finance at the University of Chicago Booth School of Business.  Professor Kaplan may very well be one of the most widely published and prolific scholars on the topic of executive compensation.  The person who is against the motion is Nell Minow, who is Editor and Co-founder of The Corporate Library, which is an organization that bills itself as “…the leading independent source for U.S. and Canadian corporate governance and executive & director compensation information and analysis”.  Anyway, this debate should certainly be interesting to follow!

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