Heresy! Stop Paying CEOs Performance Bonuses, Harvard Business Review Says

For Harvard Business Review to advise companies to stop paying executives based on performance is like your local church telling parishioners to stop dropping money in the collection basket. Yet there it is, in an article published on the magazine's website Feb. 23: "Performance-based pay can actually have dangerous outcomes for companies that implement it."

Lest there be any mistake, the article goes on to say, "We argue in favor of abolishing pay-for-performance for top managers altogether. We propose that, instead, most firms should pay their top executives a fixed salary."

Salaries account for only 4 percent of compensation for top execs, according to the Bloomberg Pay Index, which ranks the 200 highest-paid executives using the most recent data available as of a company's fiscal year-end.