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To Thine Own CEO Be True: Tailoring CEO Compensation to Individual Personality and Circumstances

Fisher, William O.

Eight-figure compensation. Cash. Restricted stock. Options. Performance shares. And more. Companies shower their CEOs with pay in large amounts, delivered in multiple ways, and dependent on complex and intricate formulae. It is all intended to motivate the top officers to make decisions that will best benefit their companies. Common sense tells us that the value of a complicated, multifaceted pay package—and hence its ability to motivate—will depend on the psychological characteristics and financial circumstances of the particular executive being paid. Economic theory and empirical studies confirm this intuition. Yet, companies generally ignore these vital factors. Substantive and disclosure law should push them to take these key variables into account.

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Also Published In

Title
Columbia Business Law Review
DOI
https://doi.org/10.7916/cblr.v2017i2.1721

More About This Work

Academic Units
Law
Published Here
November 20, 2019