yup, this is taught in MBA programs as a classic example of a moral hazard/principle agent problem. executives are offloading downside risk to shareholders and

yup, this is taught in MBA programs as a classic example of a moral hazard/principle agent problem. executives are offloading downside risk to shareholders and locking in profits for themselves. one way to discourage such behavior is the lengthen the time horizons of performance incentives like stock grants and bonuses (to, say, 7 years).