Executive Bonuses: An Excess Of Crony Capitalism And Corruption

I recently had my attention called to a great post on the WSJ.com blog by Henry Mintzberg, a professor of management at McGill University in Montreal. Though it’s the opposite of the sort of advice one would expect to get from the Wall Street Journal, it was apparently first posted in 2009 and then re-upped in November, 2012:

I’m no economist nor management or business guru, so I have no idea how widely shared are Prof. Mintzberg’s views. I recount them here in some detail first, because they make a lot of sense, and second, because they expose many of the flaws of economism in the form that it takes in actual practice (which is quite distinct from economism as theory, which has its own set of problems).

Mintzberg starts off noting that many are recommending changes to the system of paying bonuses to top corporate execs. This, he says, is a waste of time; it is far better just to eliminate all such bonuses. The system, he argues, is not fixable. He goes on to call it like it is: “Executive bonuses—especially in the form of stock and option grants—represent the most prominent form of legal corruption that has been undermining our large corporations and bringing down the global economy.” [...]