Trust the owners
The National Post
19th January, 2010
Summary: The recent bail-out of major banks by federal governments is causing some to call for restrictions on executives’ pay. Those who run the Montreal Economics Institute are wary of such proposals. They believe that government inteference will reduce the effectiveness of a free market for executives.
Excerpt: “When, under pressure from those critics, governments try to replace supply and demand in setting remuneration by other arbitrary rules, they distort the most important mechanism by which firms can influence the choice of their executives and their overall governance structure.”
