Articles: Incentives, Executive Compensation & Governance

Articles I've Written on Incentives, Executive Compensation & Governance:

Capital versus Talent
I believe there as a modern and very important battle being waged between capital – i.e. shareholders – and talent – i.e. senior and specialized executives – for the spoils of their joint activity.  Before 1980, talent worked placidly for management without making huge demands of compensation.  But then talent woke up and ever since has been working assiduously to take an ever-bigger piece of the economic pie, frustrating and angering capital.

Rotman Magazine
Capital vs. Talent: The Battle That's Reshaping Business (Fall 2003)
Harvard Business Review
Capital vs. Talent: The Battle That's Reshaping Business, with M. Moldoveanu (July 2003)
The Globe and Mail
Workers and Capitalists, Unite! (with Mihnea Moldoveanu) (July 28, 2003)
AFR (Australian Financial Review) Boss Magazine
Talent vs. Capital (Sept. 2003)
Rotman Magazine  (Have PDF)
Capital vs. Talent: The Battle Rages On (Fall 2008)

Executive Compensation
I believe that the practice of executive compensation is deeply flawed and see that fundamental fixes have to take place in order to have executive compensation that produces outcomes that we would actually want.  Much of my advocacy relates to the flawed practices around stock-based compensation.

Corporate Governance
Sadly, I believe that our governance systems are not clearly thought through and we expect directors to perform in ways they are unlikely to have the incentives or capabilities to do.  My work in this area attempts to go back to first principles to unravel the shortcomings of governance systems and suggest fundamental improvements.

Incentives and Smart Regulation
I write from time to time on government regulatory strategy.  In particular, I am a critic of input regulation, where instead of focusing the regulation on the output we want, we focus on regulating some input, which inadvertently creates incentives that result in us getting the opposite of what we want. For example, Canadian broadcast regulators would like a particular output – more watching of Canadian-made television programs by Canadians.  But instead of focusing on regulation that promotes that output, they regulate input – percentage of prime time shows that must be Canadian – and create an incentive to produce lots of crummy Canadian shows that Canadians don’t watch.

Human Nature and Incentive Systems
I also right about human nature and how we often fail to understand fundamental aspects of human nature when we design compensation systems. In particular, we over-estimate the power of monetary incentives and under-estimate the power of fear.

Articles About My Work in Incentives, Executive Compensation & Governance:

Interviews About My Work in Incentives, Executive Compensation & Governance:

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