No windfall clause: the CEO gets 10% of profits to spend on whatever they want (because they own 10% of the company)
Windfall clause: the CEO gets 5% of profits to spend on whatever they want (because they own 10% of the company and half of the profits are distributed to shareholders) + 50% of profits to spend on charity (because 50% of profits go to the windfall, which they choose how to distribute)
And maybe CEOs prefer 5% personal + 50% charity to 10% personal
So the windfall clause makes racing dynamics worse
I think the claim is:
No windfall clause: the CEO gets 10% of profits to spend on whatever they want (because they own 10% of the company)
Windfall clause: the CEO gets 5% of profits to spend on whatever they want (because they own 10% of the company and half of the profits are distributed to shareholders) + 50% of profits to spend on charity (because 50% of profits go to the windfall, which they choose how to distribute)
And maybe CEOs prefer 5% personal + 50% charity to 10% personal
So the windfall clause makes racing dynamics worse
Yup, this is a good summary.
Ah, thanks for the summary of the claim. Apologies for misunderstanding this in my initial skim.
I agree with Rameon’s comment.