In the forthcoming University of Pennsylvania Law Review paper The Partner-Manager: Some Thoughts on Bebchuk and Fried, which comments on Lucian Bebchuk and Jesse Fried, “Paying for Long-Term Performance” [U. Pa. L. Rev., Vol. 158, p. 1915-1959, 2010], I argue that this work, and their work on executive compensation more broadly, addresses the symptoms of excessive compensation without examining or taking account of the deeper structural changes that compensation practices have led to in the broader context of corporate governance. The American history of the role of senior corporate executives reveals an evolution, from entrepreneurial leadership in early industrialism to the rise of the professional manager, as described by Alfred Chandler. A third stage of evolution has taken place over the last twenty years. That is the shift from professional manager to what I call the “partner manager,” at least at the highest executive levels.

(more…)