This paper discusses some issues of compensation policy in business and academia from the perspectives of incentive theory, other theories, and empirical research. The main conclusion is that mechanical rules for performance-related pay are likely to be inferior to more subjective performance...

This Article argues that employees should serve as intra-firm monitors of executive performance and pay. Employees and shareholders, labor and capital, can monitor executive performance and pay at different levels. Diffuse, diversified, and short durational shareholders currently monitor through...