Tag Archives: incentives

How Bonuses Promote Excessive Risk-Taking

Head I win tails you lose compensation boosts risk-taking

In 2002 Fannie Mae gave CEO Franklin Raines a salary of just under $1 million, a bonus of $3.3 million, stock options worth $6.7 million, and a “long-term” incentive payment of $7.2 million. These non-salary payments were each geared to Full entry→