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(1) The study specifically talks about the motivational effect of performance pay and finds that the component of luck means that performance pay must be more difficult to achieve in order to motivate the executive officers to align their interests with the company.

(2) You could reduce the financial risk of executive officers by paying them a fixed salary. In fact, different companies offer very different compensation plans. This was a review of those plans to see what did and did not work. Generous performance pay does not work.

(3) This is an issue of whether executive officers should be paid well in general, not the value of performance pay. And at any rate seems to be a justification for nepotism in an area of business that is already dysfunctionally nepotistic.