Designing CEO Pay to Drive "Good" Behavior
Harvard Business Review
OCTOBER 13, 2011
If CEOs are going to operate for stakeholder value — rather than just for shareholder value — then their pay ought to be structured in a way that supports them doing so. For long-term incentive plans, the dominant measure is total shareholder return (TSR). The primary measurement it uses in its recommendation on each company's advisory 'say on pay' vote is the movement of the CEO's pay in relation to the company's one- and three-year TSR.
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