Is It Time to Reform Executive Compensation and Stock Option Grants?

In recent decades, executive compensation has increasingly shifted toward a model tied to stock option grants. As a result, many corporations fixate on short-term stock gains, harming the nation’s ability to innovate and build a long-term focused, sustainable economy. This trend in executive compensation raises the question of whether there are better ways to reward executives and make them more accountable to shareholders, stakeholders, and society.

On September 27, Governance Studies at Brookings hosted a forum on executive compensation practices and the links to economic vitality. A panel of experts discussed the changes in corporate pay since 1980 and how they have affected companies’ long-term viability, as well as possible solutions that would encourage executives to focus on long-term business goals and growth.

After the program, speakers took audience questions.