Executive compensation, based on performance, can theoretically constrain pay, but companies are paying their top executives more

Question:

Executive compensation, based on performance, can theoretically constrain pay, but companies are paying their top executives more and more. The median compensation of a CEO in 2013 was $13.9 million, up 9 percent from 2012. 

What is the economic problem that CEO compensation schemes are designed to solve? Would paying executives with stock align their interests with shareholders?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Microeconomics

ISBN: 978-1292094632

12th edition

Authors: Michael Parkin

Question Posted: