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Full-Text Articles in Securities Law
Executive Compensation: If There's A Problem, What's The Remedy? The Case For "Compensation Discussion And Analysis", Jeffrey N. Gordon
Executive Compensation: If There's A Problem, What's The Remedy? The Case For "Compensation Discussion And Analysis", Jeffrey N. Gordon
Faculty Scholarship
High levels of executive compensation have triggered an intense debate over whether compensation results primarily from competitive pressures in the market for managerial services or from managerial overreaching. Professors Lucian Bebchuk and Jesse Fried have advanced the debate with their recent book, Pay Without Performance: The Unfulfilled Promise of Executive Compensation, which forcefully argues that current compensation levels are best explained by managerial rent-seeking, not by arm's-length bargaining designed to create the optimum pay and performance nexus. This paper expresses three sorts of reservations with their analysis and advances its own proposals. First, enhancing shareholder welfare is not, as a …
Governance Failures Of The Enron Board And The New Information Order Of Sarbanes-Oxley, Jeffrey N. Gordon
Governance Failures Of The Enron Board And The New Information Order Of Sarbanes-Oxley, Jeffrey N. Gordon
Faculty Scholarship
Analysis of the corporate governance crisis that manifested itself in the United States at the turn of the millennium requires separating its various strands. The Enron Corporation ("Enron") debacle and the dot corn bubble and collapse, for example, share some common elements but in other ways they are quite different. In both cases investors became aggressively enamored of an unsustainable business model. In the dot com case it was the belief that an innovator in a rapidly growing market could attain powerful first mover advantages that would produce an eventual cascade of profits, so that a current and increasing stream …
Tax Constraints On Indexed Options, David M. Schizer
Tax Constraints On Indexed Options, David M. Schizer
Faculty Scholarship
Indexed stock option grants reward executives for outperforming a benchmark, such as the market as a whole or competitors in the same industry. These options offer superior incentives by limiting the influence of factors beyond an executive's control, such as general market and industry conditions. Yet indexed options are almost never used. Professor Saul Levmore seeks to explain this puzzle with norms. This comment on his article argues that tax plays a larger role in this puzzle than he acknowledges, although tax is not a complete explanation. Accounting and Professor Levmore's norms-based account are then briefly considered.