• book

From the Publisher

Prodded by economists in the 1970s, corporate directors began adding stock options and bonuses to the already-generous salaries of CEOs with hopes of boosting their companies’ fortunes. Guided by largely unproven assumptions, this trend continues today. So what are companies getting in return for all the extra money? Not much, according to the empirical data.

In Indispensable and Other Myths: Why the CEO Pay Experiment Failed and How to Fix It, Michael Dorff explores the consequences of this development. He shows how performance pay has not demonstrably improved corporate performance and offers studies showing that performance pay cannot improve performance on the kind of tasks companies ask of their CEOs. Moreover, CEOs of large established companies do not typically have much impact on their companies’ results. In this eye-opening exposé, Dorff argues that companies should give up on the decades-long experiment to mold compensation into a corporate governance tool and maps out a rationale for returning to the era of guaranteed salaries.
Published: University of California Press on
ISBN: 9780520958593
List price: $34.95
Read on Scribd mobile: iPhone, iPad and Android.
Availability for Indispensable and Other Myths by Michael Dorff
With a 30 day free trial you can read online for free
  1. This book can be read on up to 6 mobile devices.

Related Articles

Entrepreneur
2 min read

Manage Your Home Economics as If You Are Running a Business, and Watch Your Savings Grow

I'm convinced that more people would achieve financial success if they managed their home economics as if they were running a small business. As a business owner, you do snap cost/benefit analysis on nearly every decision you make, but for some reason this intellectual rigor gets tossed out the window when it comes to personal finance. We frequently fall into the trap of expending a great deal of energy for a small financial payoff. Here are some examples. Daily victories. Welcome to the bread-and-butter of personal finance: easy and quick decisions that yield small rewards. I'm talking about
The Atlantic
3 min read

Where U.S. Companies Stand on the Border Adjustment Tax

A divide is emerging among American companies when it comes to the Trump administration’s proposed border adjustment tax. For some, the tax—which would shift taxation from where goods are produced to where goods are sold—could bode poorly, since prices for consumers would go up, potentially decreasing demand for their products. But for others, there may be a benefit, as the tax could increase demand for American-made goods, boosting sales and jobs. On both sides, companies have potentially billions of dollars at stake. Lobbyists in the retail, energy, and auto industries have already started a
The Atlantic
6 min read

The Appealing Logic That Underlies Trump’s Economic Ideas

For years, whenever people have seen their livelihoods vanish, politicians have told them to “move to opportunity” or to “get more skills and work harder.” Embedded in their message is the assumption that there is no way to stop the market’s force, and that the best people can do is to fight for their tiny share. President Trump rejects this. For him, the way to create economic prosperity is to “follow two simple rules: Buy American and hire American”—a line he has deployed many times with small variations, including in his address before Congress, and that he has echoed in preparing for his v