Teena Lerner: Dividing the Pie at Rx Capital (A)

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Case

Reference no. 9-406-088

Subject category: Human Resource Management / Organisational Behaviour

Authors: Boris Groysberg; Victoria W Winston; Robin Abrahams

Published by: Harvard Business Publishing

Originally published in: 2006

Version: 3 January 2012

Revision date: 07-Feb-2012

Length: 25 pages

Data source: Field research

Topics: Performance measurement; Entrepreneurship; Organizational development; Compensation; Incentives

Share a link: https://casecent.re/p/70315

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Abstract

Teena Lerner started her own hedge fund firm in 2001 after nearly 20 years as a star biotechnology analyst and hedge fund manager. After the start-up phase, her firm became highly profitable. In 2004, however, one of her four analysts lost a lot of money for the firm. If Lerner followed the existing compensation system, she would wind up significantly underpaying her other analysts, all of whom had performed well. Should she follow the compensation system or not? And what should be done about the underperforming analyst?

Locations:

United States; New York

Industries:

Health care services; Hedge funds

Size:

10 employees, USD6 million revenues

Other setting(s):

2004