What's wrong with executive compensation? A roundtable moderated by Charles Elson

The value that many superpaid CEO superstars supposedly created has largely disappeared, and the likelihood that it will be recovered anytime soon seems remote. On top of that, a good number of top executives treated their companies like ATMs, awarding themselves millions of dollars in corporate perks. It's hard to dispute the idea that executives were corrupted by the sums of money dangled in front of them. What's wrong with executive compensation, and what can we do about it? HBR and the University of Delaware's Center for Corporate Governance convened a round-table of compensation experts last October on the university's campus in Newark, Delaware. The 12 panelists, from CEOs to investors, from the professionals who advise them to a chief justice who rules on their disputes, provided an extraordinary diversity of viewpoints. The panelist began by debating ways to align the interests of the senior executives with the long-term interests of the company-weighing the relative benefits of stock options versus stock grants, for instance. But the discussion expanded to cover broader questions of corporate governance and company values. "The main reason compensation increases every year is that most boards want their CEO to be in the top half of the CEO peer group," said Ed Woolard,Jr., a former CEO of DuPont. And compensation lawyer Joe Bachelder pointed out the danger of structuring pay in such a way that it dampens risk taking among executives. It was a lively and wide-ranging discussion of one business's most pressing issues.