HR directors now receive share option incentives

Growing numbers of HR directors are beginning to enjoy senior management perks such as share options, according to a report.

The study by consultancy Towers Perrin found HR directors in 18 out of 26 countries are now given share options as long-term incentives compared with six four years ago. Damian Carnell of Towers Perrin said, "It is no accident that the use of stock as a compensation device coincides with the emerging appreciation of human capital as a key area for sustained competitive advantage.

"Employers recognise that employees who directly share in company financial results are more likely to be engaged, which in turn tends to correlate to higher corporate performance."

The Towers Perrin 2000 worldwide total remuneration report also found nearly one in four employees said they would accept lower pay increases in exchange for more incentives.

Nearly two-thirds said they believe that when employees own company stock they feel more committed to the company’s success. The report also found HR directors in Argentina are the best paid, beating the US, Brazil, Belgium and UK. But UK accountants beat the rest when it comes to pay levels, earning almost double that of their European colleagues.

Middle management accountants are also benefiting from better remuneration packages. Four years ago few received long-term incentives but now the US, UK and South Africa pay them incentives such as share options.

UK accountants were not the only ones at the top of the pay league: UK chief executives also earn more than their continental colleagues. Overall, the United States still leads the way in providing long-term incentives to employees primarily by offering stock options. But the authors believe that in an increasingly global talent pool other countries are being forced to follow suit.

By Kathy Watson

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