I would not mind if EMC would adopt this concept.
Tightening the Link
There's an interesting story on executive pay ("Boards Tie CEO Pay
More Tightly to Performance") on the front-page of today's Wall Street Journal.
"Amid rising complaints about excessive executive compensation, an increasing number of corporate boards are imposing performance targets on the stock and stock options they include in their CEOs' pay packages. Such targets are the latest strategy in a decades-long effort to tighten the link between top executives' bank balances and their employers' success."
It appears the number of major U.S. corporations basing a portion of the equity granted to their CEOs on performance targets is steadily increasing. Last year, 30 out of 100 corporations imposed performance targets, up from 23 in 2004 and 17 in 2003. One analyst is predicting that by the end of 2006, half of the nation's big companies will use such awards.
According to the WSJ article, NCR Corp., a maker of ATMs and other products, recruited its CEO last summer partly by offering him a $1 million salary and $500,000 guaranteed bonus for 2005. But he stands to lose 400,000 of his 650,000 options unless the company reaches an undisclosed level of cumulative net operating profit by Dec. 31, 2008. NCR directors embraced the idea of performance-linked options months before they recruited their CEO because they felt a CEO only "should win when shareholders win."
What a novel concept...
posted by Money Politic$ at 12:42 PM 92 comments
lkmp.blogspot.com |
