Journal of Corporation Law

Articles cover corporate legal topics and development important to businesses, scholars and practicing lawyers.

Articles from Vol. 30, No. 4, Summer

A Real World Critique of Pay without Performance
I have read Pay without Performance.1 It is a major undertaking. Its lengthy chapter notes and voluminous references attest to both the quality and quantity of work undertaken by its authors. My careful reading was a valuable learning experience. While...
CEO Pay for Performance: The Solution to "Managerial Power"
I. INTRODUCTIONI believe that Pay without Performance by Professors Bebchuk and Fried is an important theory and a book that has some merit. ' But like many economic and human phenomena, I think that there are numerous factors that influence the CEO...
Comments on Pay without Performance
I. INTRODUCTIONIn a thought-provoking book, Pay without Performance, Professors Lucian Bebchuk and Jesse Fried examine factors that can prevent executive pay from accurately reflecting true performance.1 There is no more complete and carefully considered...
Corporate Culture and the Problem of Executive Compensation
Let me begin by saying that I was struck by an observation made by Ken West in his contribution to this symposium. He posed the question: "Is corporate America bending the social contract business has with the American public?" I wholeheartedly agree...
Executive Compensation at Fannie Mae: A Case Study of Perverse Incentives, Nonperformance Pay, and Camouflage
In December 2004, the board of the Federal National Mortgage Association (Fannie Mae), a financial company of great importance in the U.S. economy, asked CEO Franklin Raines and CFO Timothy Howard to step down. The departure of the two executives followed...
Executive Compensation: If There's A Problem, What's the Remedy? the Case for "Compensation Discussion and Analysis"
ABSTRACTHigh levels of executive compensation have triggered an intense debate over whether compensation results primarily from competitive pressures in the market for managerial services or from managerial overreaching. Professors Lucian Bebchuk and...
Executive Compensation: Perspectives from a Former CEO
I am tempted to tell you some stories about TIAA-CREF's experiences during the ten years that I was the CEO. Executive compensation was a major issue for us, as a part of all of our corporate governance initiatives. I am particularly proud of the fact...
Executive Pensions*
I. INTRODUCTIONWhen Fannie Mae CEO Franklin Raines was pushed out in December 2004, he departed with a generous package of retirement benefits. Fannie Mae will pay Raines an annual pension of $1.4 million for the rest of his life and the life of his...
Pay for Short-Term Performance: Executive Compensation in Speculative Markets
ABSTRACTWe argue that the root cause behind the recent corporate scandals associated with CEO pay is the technology bubble of the latter half of the 1990s. Far from rejecting the optimal incentive contracting theory of executive compensation, the recent...
Pay without Performance: A Market Equilibrium Critique
Bebchuk and Fried's book will get a lot of attention, and frankly it should.1 As Jesse Fried's remarks indicated, this area has received a lot of popular attention. I want to come back to talk about outrage perhaps a little bit later. At the same time...
Pay without Performance and the Managerial Power Hypothesis: A Comment
I. INTRODUCTIONProfessors Lucian Bebchuk and Jesse Fried have written a timely, thoughtful and provocative book that is bound to become influential.' The authors put forward a simple hypothesis of what is wrong with executive pay: CEOs have too much...
Pay without Performance: An Executive's Perspective
I'll start with a confession: I am decidedly schizophrenic and I am a former CEO. I've been a corporate director for a total of approximately 75 years, and for the last nine and a half years I've worked for TIAA-CREF as a consultant for corporate governance....
Pay without Performance: Overview of the Issues
I. INTRODUCTIONIn our recent book, Pay without Performance,1 and in several accompanying and subsequent papers,2 we seek to provide a full account of how managerial power and influence have shaped executive compensation in publicly traded U.S. companies....
Pay without Performance: The Institutional Shareholder Perspective
This is a terrific book-I basically agree with everything Bebchuk and Fried wrote-but it's also an important book because it addresses a subject that's going to be very much on the front burner over the next couple of years. 'Let me just say a couple...
Protecting the Keys to the Magic Kingdom: Shareholders' Rights of Inspection and Disclosure in Light of Disney
I. INTRODUCTION"[I]nformation is like any other valuable resource, [m]ore information is beneficial, but information is costly to produce. At some point, the costs of generating more information fall short of the benefits of having more information."...
Taxpayers as Investors: The Case for Applying Sarbanes-Oxley to Public Development Authorities
I. INTRODUCTIONRecent cases of investor fraud at publicly traded companies caused Congress to pass the American Competitiveness and Corporate Accountability Act of 2002, also known as Sarbanes-Oxley (SOX). While SOX technically only applies to publicly...
The Executive Compensation System Is Broken
Like everyone here, I think my position is probably unique, but I have a variety of credentials, for want of a better word, to address the issues presented today. It's hard for me to put them in order, but let me start off by saying that I am a concerned...
The Media and Executive Compensation: A Panel Discussion
Joann Lublin: I thought I might begin the conversation by talking about this issue that's raised in the Bebchuk and Fried book as to whether the camouflage effect is really something that is contributing to this concern we have about executive pay. In...