Throughout the world individual performance is

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incomprehensible that anyone can earn this much money in just a days work. Throughout the world, individual performance is praised upon over teamwork. When it comes to leaders and entrepreneurs, this is particularly true. For example, Jeff Bezos and Steve Jobs enjoy cult-like status and are widely known as modern tycoons of innovation. Something needs to happen, though I don’t believe stock options shouldn’t be forbidden since they do have tendencies to align managerial compensation with a
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firm’s performance as a whole. Their magnitude, along with their net impact on the value as a firm are receiving greater market scrutiny, for as I said earlier - their clumsy instrument for incentivizing managers. In principle, it would be preferable to base stock options on the performance of the corporation’s stock relative not to a base period, but to the stock of the other corporation’s in the same industry. The problem is that picking a comparison group involves considerable uncertainty. It is hardly a task to entrust with confidence to the Securities and Exchange Commission or a different regulatory agency. If aware of its limitations the agency decided to regulate with a light hang, it would be acting prudently, yet also be enabling firms to sneak over-compensation in the back door, by adroit choice of the comparison group. The receipt by accounting firms of fees for consulting services, as well as for auditing, requiring the corporation to disclose to investors the terms of its relations
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  • Winter '19
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