The future of executive pay and long term incentives
Interview with Alex Edmans, London Business School
Alexandra Beidas, Linklaters partner and head of Employee Incentives, spoke to Alex Edmans, Professor of Finance at London Business School, about issues surrounding executive pay.
Alex has recently been appointed by the UK Government to analyse the link between share buy backs and executive pay. As well as looking at this issue, Alex suggests that long term incentives are problematic because they are still tied to short term targets. He considers that a better outcome would be to have instead share awards with long holding periods, including post-employment, as long term share values best reflect a company’s performance. Alex would like to change the debate about executive pay away from quantum, towards encouraging executives to invest in innovation and training for long term company success.