A snout above the trough

Article Abstract:

There are problems with using stock options as a way of rewarding executives, one of which is that executives benefit from a general rise in stock prices. This means that they can obtain large rewards though their own company's stock price may have risen less than average. One way of avoiding this is to use indexed stock options, which only reward executives for better than average rises in stock prices, measured against a stock price index. This is the route taken by Level 3 in the options granted to its chief executive, Jim Crowe. His rewards for better than average performance are greater than with conventional stock options, in exchange for forgoing a reward for worse than average stock price rises.

Employee Benefits & Services, Economic aspects, Cover Story, Human resource management, Stock options, Employee benefits

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The great annual bonus scam

Article Abstract:

More than 75% of United Kingdom quoted companies use bonus schemes, and many of them use too short-term an approach since not enough time has elapsed to assess whether a bonus is merited. Ann Iverson, chairman of Laura Ashley, collected an inappropriate bonus prior to being sacked. Bonuses may be paid due to incompetence, as occurred at Powerscreen. Hillsdown is another case where bonuses have been paid to directors who have not performed well. Bonus schemes may be commonplace, but this does not mean that they are realistic.

Management Bonuses, Management, Bonuses

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Stand up and be counted

Article Abstract:

The UK Labor Party plans amendments of government legislation on pensions to focus pension funds on the issue of the pay of members of the boards of companies they invest in. Institutional investors are divided on this issue, with some arguing that share performance is more important, and others avoiding companies where directors' rewards are seen to be too high. The Labor Party also plans a banking regulatory body, a move which is opposed by the banking industry.

Economic policy, Labour Party (United Kingdom)

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