COMMENT If you have to fail, best to fail as the boss of a big US corporation. This week, Bob Nardelli left Home Depot shareholders holding shares worth somewhat less than when he arrived six years ago, but he has walked away with a severance package worth $210m. Mediocrities everywhere will be cursing their choice of career.
Admittedly, it is not easy to find the right mix of incentives for executives. A miserly pay package will attract weak candidates. A package that does not reward success will invite bureaucratic box-ticking. Poorly designed executive compensation can also encourage excessive risk-taking, short-sightedness, or even fraud. Executive pay is a difficult business.
