One of main corporate governance problems that plague the investors is the high salaries paid to the executives. Such high salaries were justified to keep the executives motivated. This article emphasizes, based on literature survey, that in spite of the existence of the many perquisites, money...

The "ratchet effect" refers to a phenomenon where workers whose compensation is based on productivity strategically restrict their output, relative to their capability, because they rationally anticipate that high levels of output will be met with increased or "ratcheted-up" expectations in the...