Larry Ribstein is a smart, albeit conservative, academic at the University of Illinois who writes about corporate governance issues (among other business issues at Ideoblog) and has been a long-time blogger. Lucian Bebchuk is a liberal professor at Harvard who is one of the — if not the — leading liberal voice on corporate governance issues. I had the opportunity to work on a case in which Bebchuk provided his expertise, and the man is remarkable.
When both Ribstein and Bebchuk agree that salary caps passed last week are no good — Bebchuk here and Ribstein here — that concerns me greatly. Although Ribstein’s opposition might be predictable, Bebchuk’s is not. Here he is:
To be sure, incentive compensation in many public companies has been flawed. Some incentive compensation has been so in name only, and some of it has provided perverse incentives to focus on short-term results to the detriment of long-term performance.
But these problems require tightening the link between pay and long-term performance — not giving up on it altogether. Mandating that at least two-thirds of an executive’s total pay be decoupled from performance, as the stimulus bill does, is a step in the wrong direction.
This makes sense to me, and I hope that Bebchuk and the Congressional Oversight Panel’s Elizabeth Warren — also at Harvard — talk about this and work to come up with some long-term solutions that focus on, as Bebchuk writes “long-term performance.”
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Chris Geidner is the award-winning senior political editor at D.C.'s Metro Weekly and has written for The Atlantic Online, The American Prospect, Advocate.com, Salon and other publications, as well as at his blog, Law Dork. In 2011, he received the Excellence in News Writing Award from the National Lesbian and Gay Journalists Association for his coverage of "Don't Ask, Don't Tell" repeal. Prior to moving to D.C. in 2009, he served as an attorney on the senior staff at the Ohio Attorney General's Office and had earlier worked for a leading Columbus law firm. An extended biography can be found