Executive Compensation's Role in the Financial Crisis

Pay structures often spur chiefs to focus on short-term results rather than long-term value

, The National Law Journal

At the heart of the financial crisis that has paralyzed global markets is a mystery: How could the world's masters of the most sophisticated banks and financial institutions stake their businesses on collateralized debt obligations and mortgage-backed securities that have proved to be so toxic? Attorneys Christopher Keller and Michael Stocker say the answer may lie in the murky world of executive compensation, and efforts to prevent similar catastrophes in the future could depend on unlocking its secrets.