If not, then there's little surprise when incentive compensation issues raise a red flag with shareholders. Yet, we believe that shareholders have no qualms in compensating the most talented managers for superior returns. The level of pay is a secondary concern when the pay is really for performance. With several highly visible exceptions, it's not how much managers make, it's how they make it. Unfortunately, in most companies the connection between pay and performance is tenuous at best.
Many executives receive the benefits of stocks and bonuses with little or no down-side risk.
Rather than being motivated to focus on what's best for the company, managers are motivated to protect their own positions. From the shareholder's perspective, the primary objective of executive incentive compensation should be to reward those who create lasting value, not short term profits, and to differentiate management's contribution to share value from the generalized contribution of its and the economy. We are constantly challenging traditional ideas about strategic pay practices. The results are innovative structures that accommodate our clients' unique objectives, and really do result in top performance. These innovative plans typically attract the attention of aggressive management teams that are confident about their ability to produce results.