Case | HBS Case Collection | November 2008 (Revised January 2012)

Teena Lerner: Dividing the Pie at Rx Capital (Abridged)

by Boris Groysberg, Victoria Winston and Robin Abrahams

Abstract

Teena Lerner, the CEO of Rx Capital, had a problem. Her three-year-old hedge fund was highly profitable, but in 2004, one of her four equities analysts lost a lot of money for the firm. If Lerner followed her existing compensation system, designed to reward teamwork, he would wind up significantly underpaying her other analysts, all of whom had performed well. Should she follow the compensation system or not? And what should be done about the underperforming analyst?

Keywords: Compensation and Benefits; Employee Relationship Management; Performance Evaluation; Groups and Teams; Financial Services Industry;

Citation:

Groysberg, Boris, Victoria Winston, and Robin Abrahams. "Teena Lerner: Dividing the Pie at Rx Capital (Abridged)." Harvard Business School Case 409-058, November 2008. (Revised January 2012.)