This is an English translation with new additions from the German book contribution “Krisensichere Leistungsmessung und Bonuspläne” in “Turnaround - Navigation in stürmischen Zeiten: Maßnahmen zur Krisenbewältigung und Auswirkungen auf die Rollen von CFOs und Controllern” by the...

Neither caps nor new regulations are the solution for excessive pay: the solution is indexing operating performance. The true culprit of excessive pay was neither ineffective governance nor bad bonus plans: it was excessive performance. To be fair, performance evaluations should differentiate...

The core problem of executive pay is neither shareholder votes on pay as discussed in the US and Switzerland, nor a multi-year assessment period as made mandatory in Germany by law. The core problem is non-indexed performance measurement which causes in-reversibly spiraling executive bonuses