Michael C. Jensen was an early inventor of bigger-than-life compensation packages for corporate chief executives, and nearly 20 years later, he still believes passionately in the concept of “pay for performance” that he championed.
But along the way more than a few things went wrong, Mr. Jensen acknowledges, and now he is trying to find ways to fix the flaws that, in his evolving view, often allow mediocre chief executives — even outright failures — to become fabulously rich.
“There are all kinds of mistakes, and we can do a lot better,” Mr. Jensen, a professor emeritus at Harvard’s Graduate School of Business, said in an interview at his modernistic home on Siesta Key, with its huge picture windows overlooking the Gulf of Mexico some 40 feet away. It is one of two luxury houses — the other is in Sharon, Vt. — that reflect an academic life marked by success not just in scholarly pursuits but as a business consultant and popular speaker as well.
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