Each year most public companies issue reports describing the pay packages of their CEOs. In them compensation committees attempt to explain the rationale behind the pay figures to the shareholders, who often must vote to approve them. The issue is, in their reports many committees adjust performance numbers in obscure and inappropriate ways that lead to overly generous CEO pay. And they do so using nonstandard criteria that are difficult for even sophisticated institutional investors to decode. In this article, the former executive chairman of MFS Investment Management and an MIT professor of accounting and finance sort through the reports’ fine print and expose practices that stack the deck in CEOs’ favor: Adjusting earnings to be 100% higher than GAAP income. Paying out 80% of an incentive award for bottom-quartile performance. Choosing “peer companies” that are not comparable in size or in industry. And more. Shareholders should be more skeptical, say the authors, and comp reports must start providing much clearer explanations. But what’s needed most are new standards for compensation design and reporting [Download the full article here.]
A portion of Angela Zutavern’s new book The Mathematical Corporation: Where Machine Intelligence and Human Ingenuity Achieve the Impossible has been excerpted in the Stanford Social Innovation Review.W
hy do leaders expect so much of themselves today? One reason is that society has become so interconnected—we face problems that, when institutions were more disconnected, we could ignore as “someone else’s.” But growth in knowledge and wealth has brought us to the point where we need to address insoluble problems that have long plagued society, such as disease, hunger, poverty, in new and better ways. And we need to do so together. [SSIR.org]
Read “Why You and Your Colleagues Need a Group Ritual” from Daniel McGinn’s Psyched Up: How the Science of Mental Preparation Can Help You Succeed.
When the Belfast-born actress Laura Donnelly is working on Broadway, she likes to arrive at the theater several hours before the curtain. She eats a relaxed takeout dinner, does yoga, and then performs vocal exercises. “I warm up the same way before any play — I have my set routine,” says Donnelly, who is best known for her role in the TV series Outlander. But in the fall of 2014, when Donnelly starred alongside Hugh Jackman in the Broadway show The River, she put aside her traditional pre-performance routine and did something else instead. [TIME.com]
Congrats to Jeff Goins, whose new book Real Artists Don’t Starve is a Wall Street Journal bestseller.
On the next Your Call, we’ll have a conversation with Cathryn Jakobson Ramin, author of “Crooked: Outwitting the Back Pain Industry and Getting on the Road to Recovery.” Ramin is a veteran journalist whose own struggles with back pain and related treatments led her to pull back the curtain on the darker sides of spine medicine. If you’re a patient or a provider dealing with back pain, what insights do you have? Join the conversation on the next Your Call at 10am, with Renee Kemp and you. [KALW]
Shadi Hamid has a new piece at The Atlantic.
It is difficult to imagine it now, but continental Europe struggled with foundational divides—with periodic warnings of civil war—as recently as the 1950s. Belgium, Switzerland, Austria, and the Netherlands were divided into ideologically opposed subcultures, sometimes called “spiritual families” or “pillars.” These countries became models of “consensual democracy,” where the subcultures agreed to share power through creative political arrangements. [TheAtlantic.com]
Bo Burlingham writes,
This is our second annual list of Small Giants, 25 companies that value greatness over growth. They aren’t opposed to growth—just to growth at all costs. We picked 25 businesses that have sound models, strong balance sheets and steady profits—all privately owned and closely held. They contribute to their communities. They have been acknowledged as outstanding by others in their field. And they do things any business can learn from. Here is this year’s unranked list, all hailing from a wide range of industries, including American manufacturing. [Forbes.com]
Jeff Goins, author of four previous books, has just released Real Artists Don’t Starve: Timeless Strategies for Thriving in the New Creative Age.
Bestselling author and creativity expert Jeff Goins dismantles the myth that being creative is a hindrance to success by revealing how an artistic temperament is in fact a competitive advantage in the marketplace. [Amazon]