Shareholders always complain about executive pay. They say the performance links are too weak, and the levels too high. But what can a remuneration committee do to address these concerns? How can they prove that executive pay really is designed to create shareholder value?
This book tackles executive pay from the beginning, starting with what the shareholders want. It takes a rigorous look at what we mean by performance and what we seek to achieve by linking pay to performance. It examines the current forms of executive pay and shows where things go wrong for the shareholder. Better still, it shows how these problems can be fixed. Finally, it examines the dynamics that drive the level of executive pay. It suggests changes that can be made so that the shareholder interest is met.
The unique approach of Performance and Reward starts from its clear focus on the creation of long term shareholder value. It is systematic in its examination of incentives at every level. It examines the standard arguments about executive pay, getting beneath the spin and showing where the shareholder interest lies.
This book is a “must read” for anyone involved with policy on executive pay. Remuneration committees and their consultants can use the book to steer executive pay in a new direction that adds great value for shareholders. Shareholders can use the book to evaluate executive pay and to propose changes to safeguard their interests. Policy makers will find it an essential reference point. All company directors need to know what this book says.
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