At the height of his success, Al Dunlap described in his book Mean Business a philosophy of executive compensation that came to hold sway in the late 1990s: “The best bargain is an expensive CEO . . .. You cannot overpay a good CEO and you can’t underpay a bad one. The bargain CEO is one who is unbelievably well compensated because he’s creating wealth for the shareholders. If his compensation is not tied to the shareholders’ returns, everyone’s playing a fool’s game.”
A version of this article appeared in the January 2003 issue of Harvard Business Review.