CEO pay and what to do about it

This book proposes a whole new system for incenting managers to act in the best interests of company owners.

Reversing his earlier position - that companies probably weren't paying enough to attract the best executive talent - Jensen and his coauthors are now positing that, in fact, pay packages can be too high and too risk-free, causing otherwise highly talented managers to act in ways that destroy corporate value.

The authors have identified the critical missing link in current incentive plans, namely that link between a manager's effectiveness in executing strategy and the capital market's valuation of the results, which they call strategic value accountability.

They explain how it works and how to devise a plan that holds top managers accountable for creating long-term strategic value.