Rethinking Executive Incentives Can Boost ESG Performance
Economic crises tend to have a disproportionate negative impact on employees rather than high-paid executives, whose incomes often increase even at the worst of times. The author proposes a new mechanism — parity pills — designed to be triggered by external shocks like pandemics and recessions, or internal factors like revenue declines or pay inequality thresholds — that would ameliorate the effects on workers while upping the financial responsibility of CEOs.