Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Recruitment & retention
    • Wellbeing
    • Occupational Health
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Recruitment & retention
    • Wellbeing
    • Occupational Health
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise

Latest NewsPay & benefits

Long-term incentives failing to meet the needs of executives and shareholders

by Mike Berry 23 Aug 2006
by Mike Berry 23 Aug 2006

Long-term incentives at many top UK companies are failing to meet the needs of executives or shareholders, forcing some organisations to make constant adjustments to their reward plans, new research suggests.

The report, Executive Compensation Review of the Year 2006, compares how different types of long-term incentive plans align executive pay with returns delivered to shareholders.

Traditional compensation models give outstanding reward for outstanding performance but can give rise to anomalies where performance is anything less than stellar, the report by consultancy PricewaterhouseCoopers (PwC) said.

The report shows how two FTSE100 companies delivering similar returns to shareholders over a decade can have an average level of reward that differs by a factor of five.

Tom Gosling, executive compensation partner at PwC, said: “Our research shows that commonly used designs are often not hugely successful at aligning executives’ pay with how well they perform for shareholders over a sustained period.
  
“At the same time, some plans are just too complex, meaning they can be severely undervalued by executives and, in our experience, often discounted altogether. In many cases, they are not effective in encouraging executives to perform better.”
 
The research shows that a focus on stock ownership rather than performance conditions may provide a more effective system of reward. In many circumstances, a better alignment of reward and shareholder value can be achieved by simply delivering more of an executive’s total pay in company shares and requiring them to hold this stock for a significant period of time.

Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

OptOut
This field is for validation purposes and should be left unchanged.

The report also found that the UK’s top CEOs saw their salaries rise by an average of 6% last year, compared to a high of 14% in 2000.

 

Mike Berry

previous post
Improved pay offer averts Bank Holiday strike at Stansted Airport
next post
CBI blames education system for lack of scientists and engineers

You may also like

EHRC submits new code of practice to government

5 Sep 2025

Lloyds Banking Group to target underperformers for job...

5 Sep 2025

How to manage workplace investigations effectively

5 Sep 2025

Director with cancer treated unfairly over pay, rules...

5 Sep 2025

Manager who called bosses ‘dickheads’ was unfairly dismissed

5 Sep 2025

Jaguar Land Rover staff sent home after cyber...

5 Sep 2025

Agency crackdown won’t cure NHS staffing crisis alone

5 Sep 2025

‘Terrible’ Employment Rights Bill returns to Commons

4 Sep 2025

Connect to Work scheme to benefit 15 areas...

4 Sep 2025

Sandie Peggie launches fresh legal action against NHS...

3 Sep 2025

  • Work smart – stay well: Avoid unnecessary pain with centred ergonomics SPONSORED | If you often notice...Read more
  • Elevate your L&D strategy at the World of Learning 2025 SPONSORED | This October...Read more
  • How to employ a global workforce from the UK (webinar) WEBINAR | With an unpredictable...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits Live
Employee Benefits
Forum for Expatriate Management
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2025

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2025 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Recruitment & retention
    • Wellbeing
    • Occupational Health
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise