摘要：
This paper draws attention to and raises questions about an area of executive incentive compensation, bonuses
and non-equity incentives, which seems to have disproportionally rewarded executives while shareholders remain exposed
to substantial ongoing economic risks. This area of focus has surfaced because, beginning in 2007 and continuing
throughout 2008, financial services firms incurred massive losses, while in the years immediately preceding this deluge of
losses many executives were awarded substantial bonuses and non-equity incentives. We assess the risks associated with
such payments and build a framework for assessing how shareholder and executive interests diverge as a result of bonuses
and non-equity compensation. Our analysis is also meant to serve as a building block for future empirical studies about
the relationship between executive incentive compensation paid in cash (bonuses and non-equity incentives) and the
financial misstatements and overstatements of income that were at the heart of the financial meltdown.
