October 2014

How Corporate Credit Ratings Induce Short-Termism

Corporate Finance / By

Credit rating agencies were under particular scrutiny in the recent financial crisis, as critics argue they gave too high ratings to securities that turned out to be toxic. One potential culprit is the “issuer-pays” model, where it is the company being rated that pays for credit ratings, which may encourage rating agencies to be overly-generous …

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Reforming CEO Pay – The Dangers of Short-Term Incentives

Executive Pay / By

(This post originally appeared on LinkedIn) Executive pay is a high-profile topic about which almost everyone has an opinion. Many shareholders, workers, and politicians believe that the entire system is broken and requires a substantial overhaul. But, despite being well-intentioned, their suggested reforms may not be targeting the elements of pay that are most critical for …

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