This is Ligonier's friendly neighborhood blog and an attempt to recapture our lively opinionated debates in a free speech zone.

Please join our conversations. Contributors welcome.


claysh@gmail.com

Thursday, September 3, 2015

Our perverse executive pay system

"Short-termism," as the report calls it, allows executives to "reap massive windfalls before the climate change their behaviors nurture starts hitting."

 "Energy shouldn't cost lives."Chevron is one of the many companies engaging in short-term, high-stakes gambling with the planet's future.

"Pay incentives for the chief executives of the biggest publicly-held fossil fuel companies in the U.S. are worsening climate change by encouraging recklessness from management teams and rewarding companies' strongholds over oil, gas, and coal reserves, according to a new report published Wednesday by the Institute for Policy Studies.Money to Burn: How CEO Pay is Accelerating Climate Change (pdf), an annual analysis of executive excess, outlines the complex cycle in which corporate bosses are given "enormous personal financial incentive" to promote the development of fossil fuels, which in turn allows them to donate ever-increasing funds to lobbyists and lawmakers who promote climate denial policies.

In addition, corporations "lower the performance bar by super sizing the number of equity-based rewards they grant executives during stock slumps," the report states. That's the same kind of high-stakes gambling that contributed to the 2008 economic crash and set up bankers for enormous windfalls if shares increased even slightly after the recovery began. "Our perverse executive pay system encouraged the recklessness that led to the 2008 financial crisis," co-author and IPS Global Economy Project director Sarah Anderson said on Wednesday. "These same misplaced incentives are encouraging the recklessness of fossil fuel executives that is putting the entire world at risk.""

http://www.commondreams.org/news/2015/09/02/report-extravagant-ceo-pay-packages-are-fostering-planets-destruction