enjoyed by bankers in recent years
are on their way out, according
to Jake Cohen, Dean of the MBA
programme at INSEAD.
“Compensation is going to
come down,” he says. “Executive
compensation has to be much more
aligned with long term shareholder
value rather than short term stock
performance.”
The potential ramifications of this
trend have been alarming students
at INSEAD, Cohen reveals. “Some
of the fieriest debates we have seen
are regarding compensation.” For
example, whether the CEO of a
publicly-supported bank should earn
no more than $500,000 per year. “That
has led to some heated discussions over
whether the best and brightest would
just leave and go to hedge funds or
private equity, and whether that would
lead to a further deterioration of the
quality of executives at banks.”
While Cohen would love to see the
best and brightest of his students
looking towards careers in the public
sector, overseeing banks or other
industries, the students themselves
appear keen to reap the financial
rewards seen in the banking industry
in recent years. Do they see themselves
earning more than $500,000 a year?
“They really hope they will,” concedes
Cohen.
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