Mintzberg: Eliminate Executive Bonuses

We have to make a few observations about the radical view on executive bonuses espoused by McGill University's Henry Mintzberg. First of all we do think that the main problem of all executive incentive schemes is the fact that it is arbitrarily allocating too much glory (and blame) to the CEO of a business. That may or may not be justified - individuals CAN make a massive difference as is demonstrated in sport, art and science. But there is the question of the right degree to which this is possible - and morally justified. Otherwise the US President could demand to be paid a share in the growth of the GDP during his period in office. Our position is that all incentive schemes that benefit the CEO and the top executives should only be those that are made available to ALL employees on equal terms and should be calculated on the basis of base salaries. This should include all perks and benefits (pension, health insurance, share options etc). Not only would this system be equitable and fair, it would also be transparent, easy to understand and not easy to game by top management. At the same time it would probably reduce the gap in compensation between top management and the average employee. This link between pay levels would in all likelihood also put general downward pressure on compensation for top management.