The problems of performance pay in business

Many of the performance packages are designed to promote risk-taking on the part of CEO's, but what this article points out is that CEO's typically get to keep their "winnings" but don't lose if their bets fail. As a consequence, they are unduly eager to "bet the farm," which is part of the reason for the recent sub-prime meltdown and the earlier stock-market collapse in 2001.

http://www.newyorker.com/talk/financial/2007/11/12/071112ta_talk_surowiecki