Working Paper No. 09-34:
Unintended Consequences of Executive Compensation Regulation Threatens to Worsen the Financial Crisis

Author(s):

J.W. Verret

Date Posted: July 2009

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Abstract:

This written testimony accompanied Professor J.W. Verret's oral testimony before the House Committee on Financial Services. This testimony argues that executive compensation proposals by the Administration will not address any systemic risk posed by large financial institutions. It also argues that quarterly earnings guidance is a more useful target to limit systemic risk than executive compensation practices at financial firms.