You get what you reward: Lessons from the Global Financial Crisis

Abstract

While the media and regulatory focus in the wake of the global financial crisis (GFC) has been on top-management remuneration, particularly incentives, this is not suffiecient. Incentive structures supported many of the risk-taking types of behaviour throughout the industry, not just senior-management levels. I review the evidence on the influence of incentives, generate frameworks for evaluating incentives and other reward structires, and provide questions for organisations that use incentives in their remuneration.