August 3, 2009

The Unintended Consequences of Executive Compensation Regulation

Key materials
Contact us
To speak with a scholar or learn more on this topic, visit our contact page.

Statutory and regulatory mandates to change or limit executive compensation structures threatens to worsen the current financial crisis.  Historically, compensation regulation has resulted in unintended consequences that weaken the overall financial system.  Past regulation has actually increased the disparity between worker and executive compensation and the current proposal would make it harder for firms to hire and retain top talent.  Better corporate governance structures would ensure that executives' salaries reflect the value they provide to the company and shareholders.