In the September-October issue of the Harvard Business Review (HBR), Olin researchers identify four principles for designing executive compensation packages that encourage managers to deliver real, sustainable value. The recommendations for refining incentive-based plans stem from ground-breaking research that employed innovative data collection and advanced statistical techniques that revealed flaws and unintended consequences inherent in many pay-for-performance compensation plans.
The research was published in the Journal of Financial Economics earlier this year and received the Olin Award for research with the most potential to impact business in 2015.
Olin authors of the HBR article, “Comp Targets That Work,” include: Radhakrishnan Gopalan, Associate Professor of Finance; John Horn, Senior Lecturer in Economics; and Todd Milbourn,Vice Dean and the Hubert C. & Dorothy R. Moog Professor of Finance.
Harvard Business Review, September-October 2017, Volume 95, Number 5, pp. 102 – 107.
Journal of Financial Economics, 2017, vol. 124, issue 2, 307-330