> all this would do is incentivize executives to run inefficient businesses into the ground.
What incentive would an executive have to run a business into the ground?
It's a business - the motive to gain profit and ambition won't leave because profit is shared.
Regardless - my point is - what's wrong with being generous to workers? Why not share a bit of that with people who work so the motivation and incentives are spread out?
Why don't we try some ideas, test some regulations and see how they work, so we know what incentivizes and what doesn't?
Have an administrative body view it on a case by case basis and come up with a novel payment plan, in a case where a CEO gets a golden parachute and employees are left unemployed, that payment would be suspended and apportioned fairly. Maybe it will even go back to investors.
> What incentive would an executive have to run a business into the ground
The one given above: laying off workers to make the business competitive results in having your salary clawed back for three years. Staying inefficient and getting out-competed does not.
> laying off workers to make the business competitive results in having your salary clawed back for three years.
If the company goes out of business due to inefficiency - then the market will supply another one that can treat workers and investors well.
And maybe it should be clawback against all assets and profits earned in the CEO's lifetime. That will give them motivation to pay off the spurned employees the fired, then start earning more for themselves.
Since this is all about free markets and scale, we need to have optimistic forecasts. There's a credit against the CEO to pay off the employees due to management failing, but the CEO can always try again in the future to pay off their newly accrued debt by making better decisions for investors and employees.
Imagine - if all management decisions were binded 50% to the welfare of the employee and 50% to profit? Bound by the law? Or face strict liability, financial penalties and possibly criminal charges for causing jeopardy to the workers? That's absolute genius.
It's all about how we define competition. What if competition is redefined to imply responsibility and obligation to caretake for workers, and every business on Earth is subject to it? What's wrong with that?
What incentive would an executive have to run a business into the ground?
It's a business - the motive to gain profit and ambition won't leave because profit is shared.
Regardless - my point is - what's wrong with being generous to workers? Why not share a bit of that with people who work so the motivation and incentives are spread out?
Why don't we try some ideas, test some regulations and see how they work, so we know what incentivizes and what doesn't?
Have an administrative body view it on a case by case basis and come up with a novel payment plan, in a case where a CEO gets a golden parachute and employees are left unemployed, that payment would be suspended and apportioned fairly. Maybe it will even go back to investors.
For a look a generous labor systems in powerful economies, I'd like to bring up Germany: http://www.siegwart-law.com/Sgal-en/lawyer-german-employment...