How (not) to pay non-executive directors

Alexander Dilger ()

No 9/2012, Discussion Papers of the Institute for Organisational Economics from University of Münster, Institute for Organisational Economics

Abstract: Performance pay, at least as usually understand, is no good idea for non-executive directors. They have to supervise and control or in some situations even to fire and replace the executive managers. This means that their performance as supervisors is totally different from the performance of the supervised executive managers and even the company at large. Moreover, they are mostly interested in other things than their pay. Thus, their pay should be fixed and not too high.

JEL-codes: D23 D82 G34 K22 M12 M21 M52 (search for similar items in EconPapers)
Date: 2012
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