Friday, November 16, 2007
No Thain, no gain:The asymmetry of risk / reward in the boardroom
No Thain, no gain:The asymmetry of risk / reward
Here's a strange thing.John Thain is taking the top job at Merrill.He must be bored indeed.
For his troubles, if he can turn the house around,his incentive bonus will be in the region of 100 million dollars.Stan took 160 million dollars for his part in Merrill's current downfall.Does that make any sense to you?
The compensation culture in investment banking and financial markets has turned the concept of performance based pay on it's head.If l destroy a company l can now expect to get paid more than if l run a company properly.It's completely counter-intuitive to the real world.It's how the mad hatter would structure a bonus culture.I love it.
RB
Here's a strange thing.John Thain is taking the top job at Merrill.He must be bored indeed.
For his troubles, if he can turn the house around,his incentive bonus will be in the region of 100 million dollars.Stan took 160 million dollars for his part in Merrill's current downfall.Does that make any sense to you?
The compensation culture in investment banking and financial markets has turned the concept of performance based pay on it's head.If l destroy a company l can now expect to get paid more than if l run a company properly.It's completely counter-intuitive to the real world.It's how the mad hatter would structure a bonus culture.I love it.
RB
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whoa! haven't checked this blog for a long time and didn't realize you picked up your pen again. welcome back!
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