Matt Levine’s Money Stuff: Moonshot Pay Kind of Works

Moonshots

The point of executive pay is to create incentives. Public companies should structure their chief executive officers’ pay packages to encourage the CEOs to act the way the companies want. What do the companies want? I dunno, it depends. Plausibly, for most companies, the answer is something along the lines of “steadily increasing profits.” Those companies should give their CEOs pay packages that encourage them to steadily increase the profits. What does this look like? Maybe a nice base salary so the CEO doesn’t have to worry about paying rent, a big bonus if profits go up, a chunk of ...