In August 1994, Lyondell Petrochemical Co. ‘s parent company and largest shareholder effectively shed its shares, the resignation of five of its 11 directors. The other outside directors intervened immediately to the executive compensation plan used to overtake pay the CEO and other top officers. This case examines the role of the Compensation Committee of the Board of Directors played in this initiative. Several important aspects of the compensation process, inclu be … Read more »

In August 1994, Lyondell Petrochemical Co. ‘s parent company and largest shareholder effectively shed its shares, the resignation of five of its 11 directors. The other outside directors intervened immediately to the executive compensation plan used to overtake pay the CEO and other top officers. This case examines the role of the Compensation Committee of the Board of Directors played in this initiative. Several important aspects of compensation, including the role of external consultants, suitable methods for measuring the performance and the motivational impact of pay plans be played on management.
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from
Jay W. Lorsch,
Daniel P. Erikson
Source: Harvard Business School
20 pages.
Release Date: 03 February, 1998. Prod #: 498028-PDF-ENG
Lyondell Petrochemical Co. HBR case solution