S4E16: Elon Musk and History of America's Huge CEO Pay Packages

►My guest claims that Mr. Musk's compensation is $0! How is this possible? ►What are the different components of a CEO's pay package?►Why have CEO salaries stayed constant for decades?

►Why did CEO stock options significantly increase in the 1990s?►Why did CEO pay for performance dramatically increase after 2006? ►Who determines CEO pay? And how? The answer and the story behind it are more complex than you might think. ►Who is driving the push to regulate CEO pay? Politicians or shareholders?

My guest is intimately familiar with Mr. Musk's pay package. Not only is he an expert on executive compensation, but he also testified in Mr. Musk's Delaware trial on behalf of Telsa.

🚩About My Guest:

Professor Kevin Murphy is a nationally known expert on executive compensation. He teaches Corporate Finance and Compensation, Incentives and Governance in the University of Southern California - USC - Marshall School of Business, where he was named chair of the department of finance and business economics and holds the E. Morgan Stanley Chair in Business Administration.

Prof. Murphy helped the U.S. Securities and Exchange Commission - the SEC - formulate disclosure rules for top management pay. And his study examining the salary trends of top executives set a benchmark in finance research.

Prior to joining USC in 1995, he was on the faculty at the Harvard Business School and the University of Rochester’s Simon School of Business.

Prof. Murphy is the author of The Economics of Executive Compensation. And as I mentioned in the opening, he is quite knowledgeable with Mr. Musk's pay package and the legal challenges against it, because he testified on Tesla's behalf at the Delaware trial.

🚩Dr. Barry Eichengreen's fascinating discussion of the history of sovereign and national debts - from Medieval Europe to modern America. I am recommending this episode because America's national debt is becoming a gigantic issue, politically and economically. For example, did you know that in the current fiscal year, the U.S. government will pay $892 billion to service our national debt? $892 is more than what we spend on defense and close to what we spend on Medicare!

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