Microsoft has been losing some of its brightest talent in recent years. The most recent to leave is Zimbabwean-born Paul Maritz, who, in terms of his technical prowess, was regarded as second to Microsoft chairman and chief software architect Bill Gates. After 14 years at Microsoft, Maritz, who is rumoured to want to relocate to SA, wants to spend more time with his family, says Mark Hill, MD of Microsoft's SA subsidiary. A falling share price is not the only risk in share-option schemes. Because the objective is to motivate employees, it's vital the decision-makers are able to see the fruits of their labour.
Share prices move on many factors, often with no relation to management and company performance.
It's particularly a problem in a consolidated group environment where underperforming subsidiaries ride on the back of the performance of other units. Key to EVA is determining whether projects beat the cost of capital. Managers are given tools to measure performance right down to the level of individual units. This ensures a clear link between performance and reward. Cadle believes share incentive schemes have a place in remuneration packages but says that they are often done without consideration of the real economic costs.