Prof. Lastra and Prof. Goodhart recently published a new paper on ‘Equity Finance: Matching Liability to Power’ as a Centre for Economic Policy Research discussion paper.
The view that Rosa Lastra and Charles Goodhart take is that any proposed corporate governance reform that does not directly impinge on prospective managerial remuneration will turn out to be inadequate and ineffective. The paper recommends making “managerial compensation as sensitive to loss as it is to profit”.
The paper was mentioned in the Financial Times Letter by Thomas F Huertas, Frankfurt, Germany, where he discusses his new paper on fixing bank governance by paying bonuses as writedown bonds.
