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Executive Compensation and Performance Goals

As part of an LA Times business section focused on executive compensation, business columnist David Lazarus wrote on Sunday about CEO bonuses.

Just as we’ve been advocating for 15 years, Lazarus believes that bonuses should be “…based only on the attainment of clear performance goals, such as increases in a company’s net income or market share.” He also feels, as do we, that bonuses and incentives (such as stock options) should be available to all employees doing a good job, not just the CEO.

This topic seems to get media attention mostly when lots of money is at stake, like when CEOs receive 8 figure bonuses despite declining performance at their company. It is critically important every day, at every company. Do more good stuff, get paid more! Great idea! I’d like to see the issue of incentives tied to performance be front and center when economic and human capital experts discuss how to get the economy back on track!