|"P Maiden" <firstname.lastname@example.org>
|Sun, 29 Oct 2000 09:21:29 +1300
Brian - for us non WRI shareholders thanks for the background from their annual report.
One quote was
"The board believes that incentive remuneration (where part of a senior executive's remuneration is determined by reference to financial performance) is the best way to align the interests of shareholders and senior executives. This approach encourages senior executives to focus more closely on those strategies for the Company which add value for shareholders"
How do this relate to findings (from the ANZ Bank, Massey etc) reported in a recent Unlimited article -
The studies show no correlation between chief executive pay and performance. In fact, they show that bosses of big companies earn more than bosses of small ones, regardless of how well the company is doing. They also show incentive compensation schemes - stock options and the like - have little or no effect on corporate performance. Most worrying, one of the reports suggests that some of the companies paying their executives the most are the most adept at destroying shareholder wealth."
The full article is http://www.sharechat.co.nz/articles/20001005-unlimited3.shtml
Might be bit old fashioned but isn't what WRI are saying what they should be doing anyway? Only reward them extra for exceptional performance is my view.
In WRI case maybe the new large shareholders might have a say who runs the joint anyway.
I am going to collate these postings and send them off to Dr Freeth for comment. Keep them coming.