savageinfidel

It's not that often that I get to see two of my favorite topics (UCONN basketball and executive compensation) collide (and on Youtube, yet). After a recent game, during the press conference, UCONN coach Jim Calhouh was asked a question by "freelance journalist and political activist) Ken Kreyeske, who apparently working for some outfit called “The Hartford News" . He asked Calhoun "Considering that you're the highest paid state employee and that there's a two billion dollar budget deficit, do you think tat" Calhoun doesn't even let him finish, and responds, "Not a dime back." He then goes on to explain that he actually makes quite a bit more than that, and that the UCONN program actually results in a significant surplus ($12 million a year) that flows back to the university. But I love the smackdown he puts on the reporter. At one pint, he asks him, "You're really not that stupid, are you?", followed by "My best adv...

One of the problems with bonuses is that they create asymmetric payoffs - there's typically an upside for some actions, but no downside (yes, I know, there's the settling up in the labor market, etc., but that's a story for another piece). To deal with this, at least one firm ( UBS ) has started using "maluses" along with bonuses " Just as bonuses (Latin for “good”) are paid out for good performance, maluses (“bad”) will be meted out if the bank subsequently makes losses or if the employee misses performance targets, UBS said. The maluses could wipe out all previously agreed share bonuses and two thirds of all cash bonuses under stringent new rules designed to align the interests of executives and traders with those of shareholders. " This concept is aslo called a "clawback", and embedding it in compensation packages so that a person has a downside component is a great idea. Looks like something we'll end up discussing in class. HT: Pr...