Tournament Theory for CEO Pay
Posted on February 7, 2008
Filed Under Management |
Interesting way to put it.
That’s because many economists believe that CEO pay is structured as it is not to spur the CEO to ever greater heights of achievement, but rather pour encourager les autres. Michael Eisner might work just as hard for $1 million a year . . . but the gigantic payoff to becoming CEO spurs those beneath him to ever-greater heights of achievement. Basically, Michael Eisner has won the employment lottery. And because the prize is so big, all of his subordinates are dutifully beavering away, vying for a chance at the gravy train.
[From Megan McArdle (February 07, 2008) - The Logic of Life: CEO Pay]
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My name is Jeff Nolan and I write Venture Chronicles. These are my thoughts on technology, innovation, management, public policy and pretty much anything else that I find interesting.
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