2012-08-17dealbreaker.com

``Because you can't really pay people as a linear function of their peformance: if they make a lot of money you can pay them a lot of money, and if they make a little money you can pay them a little money, but if they lose a lot of money you can't, for the most part, make them give you back a lot of money. So "performance-based pay" really means giving people an option on their performance -- an asymmetric instrument with more upside than downside -- and that option's value increases with volatility.''


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