Alex Tabarrok makes a bold prediction regarding the Administration’s plan to cut cash bonuses and replace them with stock.

There is no way this will work as advertised.  If the administration actually follows through, most of these executives will quit and get higher paying jobs elsewhere.  Executives not directly affected by the pay cuts willalso quit when they see their prospects for future salary gains have been cut.  Chaos will be created at these firms as top people leave in droves.  Will the administration then order people back to work?   

The plan makes me uneasy. I understand the optics on this but nonetheless its treading in dangerous waters. However, Tabarrok seems a bit off the rails here. I see lots of ticked off executives. I don’t foresee major chaos.

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