{"id":3773,"date":"2016-10-15T22:49:39","date_gmt":"2016-10-16T06:49:39","guid":{"rendered":"http:\/\/hodakvalue.com\/blog\/?p=3773"},"modified":"2016-10-23T09:27:19","modified_gmt":"2016-10-23T17:27:19","slug":"a-nobel-prize-winner-complains-about-me","status":"publish","type":"post","link":"http:\/\/hodakvalue.com\/blog\/a-nobel-prize-winner-complains-about-me\/","title":{"rendered":"A Nobel Prize winner complains about me"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-thumbnail\" src=\"http:\/\/economics.mit.edu\/timages\/22\" alt=\"\" width=\"240\" height=\"240\" \/><\/p>\n<p>Bengt Holmstrom, a co-winner of the 2016 Nobel Economics Prize, <a href=\"http:\/\/www.reuters.com\/article\/us-nobel-prize-ceopay-idUSKCN12B2QG\">rails against the complexity of executive pay<\/a>. He&#8217;s right about that. He blames compensation consultants, but that is attacking a symptom, not a cause. The underlying cause is the proliferating regulation&#8212;formal and informal&#8212;of compensation governance. This regulation creates constraints on how Boards can design executive compensation programs. Boards rationally react to those constraints by building plans of ever-greater complexity.<\/p>\n<p>The source of compensation regulations is popular disdain for high CEO pay. The intent of the regulations is to tamp down that pay, but that&#8217;s like putting nails in a board to stop a marble from rolling down. You don&#8217;t stop the marble; you just make its path more complicated.<\/p>\n<p>Nevertheless, Prof. Holmstrom is a worthy scholar, one whose research has done much to inform my discipline, even if unfortunately few practitioners have actually heard of him, or heeded his conclusions.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bengt Holmstrom, a co-winner of the 2016 Nobel Economics Prize, rails against the complexity of executive pay. He&#8217;s right about that. He blames compensation consultants, but that is attacking a symptom, not a cause. The underlying cause is the proliferating regulation&#8212;formal and informal&#8212;of compensation governance. This regulation creates constraints on how Boards can design executive [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,5,27],"tags":[],"class_list":["post-3773","post","type-post","status-publish","format-standard","hentry","category-economics","category-executive-compensation","category-governance"],"_links":{"self":[{"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/posts\/3773","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/comments?post=3773"}],"version-history":[{"count":5,"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/posts\/3773\/revisions"}],"predecessor-version":[{"id":3787,"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/posts\/3773\/revisions\/3787"}],"wp:attachment":[{"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/media?parent=3773"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/categories?post=3773"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/tags?post=3773"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}