Supplement | HBS Case Collection | 2010 (Revised from original 2009 version)

Executive Pay and the Credit Crisis of 2008 (B)

by V.G. Narayanan and Lisa Brem

Abstract

As the recession lingered on into 2009, the U.S. government sought to limit executive pay and excessive risk. The debate raged over what constituted excessive risk and how best to mitigate it. This case describes the government restrictions on executive pay for TARP recipients and delves into the debate on executive compensation and incentives that encourage excessive risk.

Keywords: Financial Crisis; Governing Rules, Regulations, and Reforms; Government Legislation; Executive Compensation; Risk Management; Business and Government Relations; Motivation and Incentives; United States;

Citation:

Narayanan, V.G., and Lisa Brem. "Executive Pay and the Credit Crisis of 2008 (B)." Harvard Business School Supplement 110-005, June 2010. (Revised from original July 2009 version.)