Senior writer John Byrne expressed some good ideas about designing incentive compensation programs for executives ("Smoke, mirrors, and the boss's paycheck," Management, Oct. 13). However, a more thorough reading of the material that he was sent explaining Union Carbide Corp.'s earnings-per-share compensation program, along with the report on executive compensation in our proxy statement, ought to have made it clear to him that we have just such a program.
We agree that compensation should be based on "goals set against an industry peer group." That is why, several years ago, Union Carbide's board adopted a plan that makes competitive performance measures overwhelming factors in the formula directors use to determine variable compensation.
As one of the participants in the program, I can assure you that the incentive opportunity and pay-at-risk elements both strongly reinforce alignment of management's actions with the interests of the owners of our shares.
Joseph S. Byck
Union Carbide Corp.