The Learning Curve

New tricks for an old dog.

Remove the incentive for stupidity

Seth asks, “What to do about Detroit,”and he give his thoughful suggestions.

My two cents is for the SEC to prohibit any NYSE-traded company to base executive compensation or bonuses upon current year profits or current stock prices.

If the company is still doing good three or five years later, then give the bonuses.  There’s too much opportunity for accounting and market buggery in the short term. Plus, compelling short term personal benefit seems to result in really bad business decisions.  It is impossible to serve two masters.

Written by Tom Fox

11/21/2008 at 1:51 pm

Posted in Advice, Business

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