Simone M. Sepe

89 Texas L. Rev. See Also 143

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Due to recent debates concerning executive compensation, incentive structures are increasingly scrutinized.  Professor Sepe reponds to Professor Fried’s argument by (i) challenging the notion that efficiency necessarily results from preventing managers from capturing extra returns, as managers may use these returns effectively, and (ii) arguing that the social costs of overpriced equity offerings are unclear.  Indeed, Sepe concludes that payment of extra returns to managers may be “necessary to preserve incentives not to waste corporate assets.”