1 posted on
06/07/2002 5:19:31 PM PDT by
Pokey78
To: Pokey78
High executive compensation may have nothing to do with current executive performance according to "Tournament Theory." Rather, it's possible that the high compensation is more a reward for those who manage to attain the top position. The promise of a large reward motivates more junior executives to work harder for the company. So, in other words, high compensation of a CEO is a reward for past performance of the CEO when he was not yet CEO. Interesting theory, anyway. http://www.gsb.stanford.edu/research/faculty/news_releases/edward.lazear/lazear.htm
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