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Thus, while poorly designed incentives (e.g. those with short vesting periods, or paying according to quarterly earnings) can backfire, to completely scrap equity will throw the baby out with the bathwater.
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Management incentives (21) The risk to banking soundness and reputation from poorly designed incentive structures 21.
Economists seeking to improve the efficiency of healthcare delivery frequently emphasize two issues: the fragmented structure of physician practices and poorly designed physician incentives.
Poorly designed job incentives: Finance professionals are compensated and rewarded for short-term superlative profits.
As policy makers consider how to reshape this troubled sector of the economy — and the need to raise taxes to shrink an enormous deficit — getting rid of a poorly designed tax incentive is good place to start.
The heavily bureaucratic approach was also poorly designed, providing perverse incentives that encouraged agency examiners to review the companies with the least likelihood of having problems.
The reforms are introduced to unbundle the vertically integrated utilities and introduce private investment and management, but these efforts often fail due to poorly designed market and incentive models.
"This proposed rule will help address a key safety and soundness issue which contributed to the recent financial crisis — that poorly designed compensation structures can misalign incentives and induce excessive risk-taking," said Sheila C. Bair, the F.D.I.C. chairwoman.
"Poorly designed compensation policies can create perverse incentives that can ultimately jeopardize the health of the banking organization," Mr. Bernanke said during a speech in Phoenix to the Independent Community Bankers of America.
The designers think conventional kettles are poorly designed.
Despite tougher rhetoric among regulators in Washington and a virtual consensus that poorly designed pay structures were a leading cause of the financial crisis, the same perverse incentives that encouraged bank executives to speculate dangerously remain in place, the report concludes.
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CEO of Professional Science Editing for Scientists @ prosciediting.com