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This seems like it would be a good reason not to link CEO pay to outcomes at all: game theory says that as long as metrics have no impact on you personally, you

This seems like it would be a good reason not to link CEO pay to outcomes at all: game theory says that as long as metrics have no impact on you personally, you don't have any incentive to game them.

jshaqaw 7y ago
Management incentives will always have agent-principal issues. These things can’t be set by autopilot. That’s why corporate governance and a fiduciary voice for shareholders is so important. Of course the same CEOs who want annual reporting also want to neuter the capability of shareholders to enforce accountability.
mikeash 7y ago
It also says you don’t have any incentive to improve them legitimately. The whole problem with metrics is that they can’t distinguish between gaming them and real improvement.
RhodesianHunter 7y ago
I disagree. If you want good long term performance, link CEO pay to long term outcomes such as making a large portion of their compensation stock that vests over 10 years.