Executive Incentives vs. Corporate Growth

Bonuses and other forms of incentive compensation are an effective motivator of executives to achieve ever higher earnings per share. The drive to produce short-term results, however, often influences management to forgo investment in capital equipment and R&D that would benefit the corporation several years hence even more than improved earnings next year would. The […]

by

Alfred Rappaport

by

Alfred Rappaport

From the Magazine (July 1978)

There is growing concern about the likelihood of a slowdown in the long-term growth of the U.S. economy. The rate and adequacy of the economy’s growth depends on three factors: capital investment, improvements in labor productivity, and advances in technology.

A version of this article appeared in the July 1978 issue of Harvard Business Review.

AR

Alfred Rappaport is the Leonard Spacek Professor Emeritus at Northwestern University’s J.L. Kellogg Graduate School of Management and author of Saving Capitalism from Short-Termism: How to Build Long-Term Value and Take Back Our Financial Future.

Executive Incentives vs. Corporate Growth

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