A growing number of corporates in the US and Europe are considering switching their executive pay arrangements from share options to performance-based share awards, according to latest research from Mercer Human Resource Consulting. Investor pressure and the corporate governance environment are prompting the remuneration re-think.
Share options schemes are commonplace for executives in the US, but a view persists that more directly performance-based initiatives tend to encourage long-term retention of shares by employees.
Depressed share prices, corporate governance issues and international accounting changes have all contributed to rising European interest in performance based initiatives.
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