Question
Suppose you are a member of company X's board of directors and chairperson of the company's compensation committee. What factors should your committee consider when
Suppose you are a member of company X's board of directors and chairperson of the company's compensation committee. What factors should your committee consider when setting the CEO's compensation? Should the compensation consists of a dollar salary, stock options that depend on the firm's performance, or a mix of the two? If "performance" is to be considered, how should it be measured? Think of both theoretical and practical (i.e., measurment) considerations. If you were also a vice president of Company X, might your actions be different than if you were the CEO of some other company?
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