Description
Executive Compensation at Lehman Brothers: Abstract
This case studies executive compensation at Lehman Brothers prior to the investment bank’s bankruptcy, in 2008, which played a key role in the worst global financial crisis in 70 years. Using information on the compensation of top executives at Lehman Brothers, the objective is to determine whether key decision-makers had incentives to take excessive risks, or whether their incentives were largely aligned with those of the bank’s shareholders.
Teaching objectives
The objective is to determine whether key decision-makers at a leading financial institution had incentives to take excessive risks, or whether their incentives were largely aligned with those of the bank’s shareholders.
Main themes covered
- Governance
- Incentives
- Executive compensation
- Principal-agent problem
- Risk taking
- Bank regulation
- Financial stability
Concepts and theories related to the case
- Executive compensation
- Risk taking
- Incentives
- Principal-agent problem
- Financial stability
Additional information
Teaching notes are available for teachers only. Contact the HEC Montréal Case Centre for more information.
