Do CEOs Deserve Big Signing Bonuses?

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Dec. 4 (Bloomberg) -- Robert Kaplan, management professor at Harvard Business School, discusses the payment of upfront bonuses to CEOs. He speaks on Bloomberg Television’s “Bloomberg Surveillance.”

As an investor, i don't mind seeing a bonus in the form of stock that invests over a number of years.

But i don't get the upfront cash amy.

Why is it happening?

Obviously the boards think commercially they have to do it to get,. a bit older get an upfront onus?

What is the difference?

He does not work for a company with stock and their is an alignment issue if jcpenney and others want to pay a big upfront bonus, find.

But it has to be aligned with shareholders.

If they make money, then the ceo makes money.

Everybody putting too much of a premium on talent and ignoring the fact that the ceo's have worked in specific companies and perhaps look late april?

-- perhaps look played a role?

I think a good ceo is worth every penny but you have to have good alignment with shareholders.

The ceo of one company could be a bad ceo at another.

It is true, a risk you take.

But if you are going to pay a big upfront payment i prefer better alignment with shareholder interests and you have to be careful about cash upfront.

Should there be other top executives that should get signing bonuses?

Not just the ceo.

But what about the cfo, cto increasingly?

Customers regularly look at their leadership team and decide they want to create more incentives and reword them and what they often do is give them additional stock or option granted that invest over time.

Good alignment, you reward shareholders, and retention incentives.

So, you give her we ward that is aligned with shareholders.

What can investors like you do if they don't like it?

You can decide whether or not to own the stock, for starters.

Obviously it affects your vote for the compensation committee.

Compensation committees in this country, they got lower approval votes proxy season than any other.

This is a critical distinction.

To be clear, you are suggesting a compensation committee of a board of a major company.

Who sits at the leadership of the compensation committee?

People like me.

Why are these guys getting cash bonuses upfront?

Is it the compensation committee, the consultants, the lawyers?

I love being recruited from outside the company, outside hires so they are leaving money on the table at the former company.


And i -- they are.

And i am a total supporter of people holding the stock they leave behind.

A form of consideration.

But those committees -- they are the drivers.

Lawyers are not driving this.

At the end of the day, the owners of this decision are the boards.

Robert kaplan.

Those numbers you showed a remarkable.

The other numbers, jacoby ellsbury.

You are sour.

What else is new?

Center fielder jacoby ellsbury of the new york yankees.

Features a little changed at the moment.

We do have a lot of economic data.

We already got mortgage applications.

Dropped 13% from last week.

Coming up later on, adp

This text has been automatically generated. It may not be 100% accurate.


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