, Columnist
Executive Pay and Blood Trouble
Also blockchains, hedge funds, tweets, misogyny, unicorns and bond market liquidity.
Should mutual funds be illegal?
There is a strain of fundamentalist corporate-finance thought that holds that executives should be paid exclusively for performance, and that "performance" should mean only things within the executives' control. If your stock goes up, but everyone's stocks are going up, you shouldn't get credit; if you run an oil company, you shouldn't get paid more just because the price of oil went up. It is a well-known puzzle that this is mostly not how executive compensation works in the real world, though it's not that much of a puzzle; executives have lots of influence over their own pay, and no one wants to have to work too hard for their money.