Cross-posted from the Accountable Strategies Blog
Why are the executives of American companies paid so much, and why is nothing seemingly ever done about it?
At least one researcher is shedding some light on this phenomenon, and his findings have to do with the often misunderstood dynamics of the relationships among corporate executives, boards of directors, and shareholders.
The work of Lucian Bebchuk at Harvard is proving to be groundbreaking in that it is challenging some long-held assumptions–in particular about the power of a company’s investors, the true owners of its wealth. Bebchuk’s seemingly counter-intuitive but well-researched findings point to the conclusion that the corporate deck is stacked in favor of the company’s executives and the board of directors, and that the shareholders are relatively powerless outsiders.
Read More