5 ms·
Or bonuses should be based on what happens during a long period of time. Say you lead a company from 2015 to 2020, but your bonus is based on how well the comp
by stretchwithme 9y ago
Or bonuses should be based on what happens during a long period of time. Say you lead a company from 2015 to 2020, but your bonus is based on how well the company does from 2020 through 2025. And if the company fails before you get your bonus, too bad for you.
I haven't read his books but find his ideas as presented in videos and podcasts to be valuable.
- ISL 9y agoThat's precisely what points 1 and 2 do, for a trader.
- mseebach 9y agoThat's exactly the idea. Your bonuses 2015-2020 are invested in the company every year, and you can only cash them out after five years, in 2020-2025. If the company tanks in 2020 your bonuses for 2015-2020 are retroactively zero.
- stretchwithme 9y agoI think companies should be rated by how much skin in the game its leaders have. Companies run by founders that still have a substantial percentage of their wealth in the company would get the highest rating. And professional managers getting stock-based short term incentives would be on the low end.