The Advisors' Blog

– Broc Romanek

Here’s an excerpt from this piece by Brendan Sheehan (also see this Reuters article):

On Monday, the Nobel Prize for Economics was awarded to Oliver Hart and Bengt Holmström, two U.S-based professors. A significant section of their work focuses on how companies pay CEOs and senior executives, and their findings, along with many other academics, have contributed greatly to a significant shift in the design (and size) of CEO pay over the past few decades.

Yet while there have been many important advancements in understanding how compensation is linked to behavior, there are some significant disconnects among the academic theory (developed in part by the two Nobel laureates), its practical application and the opinion of investors.