October 28, 2009
Vices and Virtues of Limiting Executive Compensation
Testimony Before the House Committee on Oversight and Government Reform
Russell Roberts
Affiliated Senior Scholar
Key materials
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To speak with a scholar or learn more on this topic, visit our contact page.In this testimony, Professor Russell Roberts explains that the problem with executive compensation is that executives have not been subject to the profit and loss cosequences of the free-market system. Profits encourage risk-taking, and the losses encourage prudence. If the government would resist bailouts and allow these incentives to be fully operational, there will be better outcomes as large institutions will no longer be reliant on taxpayer funds.