More on bonuses and a model for the future

Article Abstract:

Directors should be paid according to their performance but this should be measured over a long period. Pay rises related to an improvement over two years do not take into account previous performance, which may have been poor, or future performance, which could deteriorate. The baseline should be set at the time when the director joins the company, with adjustments for retained earnings and inflation. Stock options that are issued should be exercised gradually and only after a period of seven to ten years has eleapsed.

Board of Directors-Functions, Analysis, Corporate directors, Corporate governance, Boards of directors

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Oh, Sir Richard, what are we going to do?

Article Abstract:

The UK Greenbury report on executive pay has led to disputes on the issue of pensions. The cost of pay rises can lead to higher costs in terms of a final pension. The Greenbury committee has sought to calculate how much pensions cost, and argues that shareholders should be told of this cost. A salary rise of 10% can cost far more than this if the cost of the pension is taken into account. Vaux is one company which is seeking to conform to the initial recommendations of Greenbury on pensions.

Finance

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Fall-out over bosses pensions

Article Abstract:

There is a lack of clarity as to what the Greenbury committee has recommended with regard to executive pay in the UK, and executives' pensions. There is a debate as to whether the total cost of directors' pensions should be revealed in terms of the capital or transfer cost, or whether just the annual payment should be revealed. The National Associations of Pension Funds has argued for the transfer value to be revealed, but some other institutional shareholders do not agree.

United Kingdom

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