Be careful what you ask for

Incentive compensation results in different behavior.  That’s good news and bad news.

“Mylan Tied Pay to Tough Targets,” The Wall Street Journal, September 2, 2016 B1.  Bonus plan at EpiPen manufacturer may have led to pricing decisions that are now the subject of intense public scrutiny.  Huge bonuses.

But don’t officers of a company have a duty to maximize the profits for the shareholders?  Absent some other legal prohibition?  Maybe the pricing isn’t “nice,” but is it prohibited by company culture or just the culture outside the company?

Advertisements

Leave a comment

Filed under Board, Culture, Culture, Directors, Duty, Employees, Governance, Investor relations

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s