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Sovereign Wealth Funds and Long-Term Investing$
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Joseph Stiglitz, Patrick Bolton, and Frederic Samama

Print publication date: 2011

Print ISBN-13: 9780231158633

Published to Columbia Scholarship Online: November 2015

DOI: 10.7312/columbia/9780231158633.001.0001

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PRINTED FROM COLUMBIA SCHOLARSHIP ONLINE (www.columbia.universitypressscholarship.com). (c) Copyright University of Minnesota Press, 2019. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in CUPSO for personal use.date: 21 October 2019

Further Considerations

Further Considerations

Further Considerations
Sovereign Wealth Funds and Long-Term Investing
Patrick Bolton, Frederic Samama, Joseph E. Stiglitz
Columbia University Press

This chapter presents responses to some questions and/or comments raised during the panel on long-term investments. One participant asked about long-term incentives and the compensation of AIG executives, remarking that they were paid with stock that did not vest until they retired. Furthermore, over the period that panelist José Scheinkman examined, management controlled 23 percent of the outstanding stock so the threat of outside investors essentially did not exist. Scheinkman replied that in terms of the details, retirement is an endogenous decision. If all compensation depends on what is received after retirement, the value of those options during preretirement is fairly small. The same participant also commented on the belief that excess returns are associated with encouraging long-term performance by a company.

Keywords:   executive compensation, incentives, long-term investments, retirement

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