Long Term Incentives: Where Should We Take Them?
13 September 2012
Meeting Time: 16.00 - 19.00
Long-term incentives have formed part of the reward package for executives and other senior employees for many years now. Yet few of the parties involved in LTIs seem fully happy with them. Do they provide a good return on the investment in them? There are several reasons for looking at them now, not least the pending requirement for a binding shareholder vote on directors’ remuneration.
The launch of our research report ‘Long-Term Incentives: where should we take them?’ brought together the latest views of consultants, shareholders, academics and PARC members to provide a comprehensive overview of LTIs covering:
- Recent developments, including
- the ‘shareholder spring’
- latest company UK and international practice
- Consideration of the various issues that make LTIs difficult to get right, including
- the aims of LTIs and how well they meet them
- performance, targets and time periods
- alignment through ownership
- segmentation: plans below the board
- The way ahead
- do we need LTIs?
- determining your approach
- the importance of communications
- some thoughts about quantum.
One of the report’s themes addressed the need for organisations to develop LTIs that fit their circumstances and strategy. We were delighted to be joined by Hilary Oliver of HSBC and Des Pullen of Associated British Foods who explained the context, issues and insights from their firms’ approaches to LTIs.
Attended by some of the consultants, academics and institutional investors who contributed to our research, the highly-topical meeting allowed for plenty of discussion and reflection from the floor.