Linking bonuses to the granting of shares or options seems a good idea . . .
… but it is not as simple as that and Britain’s businesses can see the pitfalls that many others cannot.

Jamie Stevenson of University of Exeter Business School writes in the Times and discusses the problems of executive incentives. He argues that, in principle, linking bonuses to long-term performance via the granting of shares or share options should eliminate rewards for failure and reduce opportunities for gaming the results.

However, as Manifest points out: “Shareholders do not foresee the future cost of incentive schemes and invariably complain too little and too late.”

Links

The Times >>

Last Updated: 20 October 2009