The size of executive pay packages fell last year overall, reflecting the sluggish economy and greater public scrutiny following two years of corporate accounting scandals. But many executives still managed to reel in super-sized pay packages despite poor company performance.
John Cassidy, staff writer for the New Yorker Magazine, says that the reason why senior managers are given a huge number of stock options as part of their compensation packages is because the corporations’ board of directors revalue the company stocks regardless of how they are actually performing on the stock market.
Click the “Listen” link to hear whether corporate governance practices, including how companies determine executive pay, need reshaping, and what the massive pay checks say about cultural norms in America.
Guests:
John Cassidy, Staff Writer for the New Yorker Magazine and Author of “The Greed Cycle: How the Financial System Encouraged Corporations to Go Crazy,” an article published in the New Yorker in September 2002
Brian Hall, Professor of Business Administration at Harvard Business School and widely published author on corporate governance and executive compensation
Robert Reich, Professor of Social and Economic Policy at Brandeis and former Secretary of Labor under President Bill Clinton.
