The large severance packages offered to senior executives at Fannie Mae and Freddie Mac are just two of the latest examples of senior execs. that preside over the collapse of their companies, and are rewarded for their incompetence and/or malfeasance.
Here's an idea, compensation based on stock performance averaged over a five year period. This stock based compensation puts the fortunes of the execs more in line with the profits of the shareholders.
Not that we don't trust these stalwarts of American enterprise, but given the added incentive to keep the stock prices higher, monitoring for stock manipulation would be a good idea. Just to eliminate the temptation to bolster the stock price improperly.
The employment contracts should be written tying the severance package to a formula based on the stock performance over the last year. The outcast executives would then receive stock in their company rather than large cash payouts.
Would qualified executives sign on under these terms? You bet they would.