The role of relative market power in compensation negotiations

Justin Fox on the new frontier of executive compensation.

I think Fox's idea that employees could (should?) have a say in determining executive compensation schemes is precisely what both managers and directors are most trying to avoid. It isn't really that revolutionary of an idea, however. One of the ancillary benefits of organized labor is the provision, indirectly, of this sort of input. There was certainly a time in which directors wouldn't dare pay managers 200-400 times that which they paid typical workers. Omitted variable bias notwithstanding, it's likely no accident that this fear began to evaporate with the decline of organized labor.

Also:

Corporate governance and banks: what have we learned from the financial crisis?