Executive Compensation at Lehman Brothers
Case number : 9 100 2014 006
Date :
2014-10-29
Teaching notes included :
Yes
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.
Primary domain :
Business ethics
- Governance
Secondary domain :
Finance
Sectors :
Banking and financial services
Type :
Traditional case (Descriptive or analytical case)
Event location :
New York City
Year of start of the event :
2008
Year the event ended :
2008
Business size :
Multinational
Concepts et théories en lien avec le cas
- Executive compensation
- Risk taking
- Incentives
- Principal-agent problem
- Financial stability