> In other words, the point of executive compensation may not be to produce better results on average, but rather to increase the variance of the results. The

> In other words, the point of executive compensation may not be to produce better results on average, but rather to increase the variance of the results. The hypothesis you relate isn't implausible, but I think you either got this part backwards, or, more likely, the way you state it is misleading. The strategy would be nuts if it were intended to produce worse expected outcome in terms of monetary return at the (additional) cost of increased variance.