Weisbach on Pay without Performance

The most recent issue of the Journal of Economic Literature contains an essay in which Michael Weisbach, who recently joined us as a Guest Contributor, reviews Lucian Bebchuk’s and Jesse Fried’s Pay without Performance.  Weisbach reviews and evaluates in detail Bebchuk’s and Fried’s normative and positive claims on executive pay.  He concludes that the positive claims–Bebchuk’s and Fried’s account of the executive compensation landscape–are fairly persuasive.  However, with respect to their normative claims, Weisbach expresses doubts as to how effective their proposed reforms are going to be in practice in achieving the improvements Bebchuk and Fried seek.  The full review is available here.

More than thirty academic reviews of–and responses to–Pay without Performance have now been published, including pieces by Stephen Bainbridge; John Bogle; William Bratton; John Core, Wayne Guay, and Randall Thomas; Jeff Gordon; Bengt Holmstrom; Glenn Hubbard; Ira Kay; Arthur Levitt; and Bevis Longstreth.  A collection of those reviews is available here.