The book "Pay without Performance: The Unfulfilled Promise of Executive Compensation" by Lucian Bebchuk and Jesse Fried examines the flaws in executive compensation practices and their impact on corporate governance. The authors argue that the traditional view of executive compensation, which assumes arm's-length bargaining between boards and executives, is flawed. They find that managerial power has significantly influenced pay arrangements, leading to practices that decouple pay from performance. The book discusses the shortcomings of the official view, the role of managerial power in shaping compensation, and the need for reforms to improve executive compensation and corporate governance. The authors propose that directors should be more accountable to shareholders to reduce the influence of executives over compensation decisions. The book also highlights the economic and social costs of flawed compensation practices and emphasizes the importance of addressing these issues to protect shareholder interests.The book "Pay without Performance: The Unfulfilled Promise of Executive Compensation" by Lucian Bebchuk and Jesse Fried examines the flaws in executive compensation practices and their impact on corporate governance. The authors argue that the traditional view of executive compensation, which assumes arm's-length bargaining between boards and executives, is flawed. They find that managerial power has significantly influenced pay arrangements, leading to practices that decouple pay from performance. The book discusses the shortcomings of the official view, the role of managerial power in shaping compensation, and the need for reforms to improve executive compensation and corporate governance. The authors propose that directors should be more accountable to shareholders to reduce the influence of executives over compensation decisions. The book also highlights the economic and social costs of flawed compensation practices and emphasizes the importance of addressing these issues to protect shareholder interests.