Forum Archive Index - October 2000

[Brian Gale <brigale@i4free.co.nz>]

Thanks Peter, yes I read those reports but I was trying to be optimistic
in the case of WRI, isn't optimism about all we have left nowadays ?
 
Hopefully there are some companies out there who don't fall into the
general mold and personally I have difficulty in attributing the '
destruction of shareholder wealth'  solely to the remuneration of
their executives, I feel it is far more complex than that and a subject
for debate all on it's own.  The media love the "blame
game"  and very often get it wrong.

Regards
Brian




At 09:21 29-10-00 +1300, you wrote:
> Brian - for us non WRI shareholders
> thanks for the background from their annual report.
>  
> One quote was 
>  
>       "The board
> believes that incentive remuneration (where part of a senior executive's
> remuneration is determined by reference to financial performance) is the
> best way to align the interests of shareholders and senior
> executives.  This approach encourages senior executives to focus
> more closely on those strategies for the Company which add value for
> shareholders"
>  
> How do this relate to findings (from the ANZ Bank, Massey etc) reported
> in a recent Unlimited article -
>
> The studies show no correlation between chief
> executive pay and performance. In fact, they show that bosses of big
> companies earn more than bosses of small ones, regardless of how well the
> company is doing. They also show incentive compensation schemes - stock
> options and the like - have little or no effect on corporate performance.
> Most worrying, one of the reports suggests that some of the companies
> paying their executives the most are the most adept at destroying
> shareholder wealth."
>
> The full article is 
> http://www.sharechat.co.nz/articles/20001005-unlimited3.shtml
>
> Might be bit old fashioned but isn't what WRI are saying what they should
> be doing anyway?  Only reward them extra for exceptional performance
> is my view. 
>
> In WRI case maybe the new large shareholders might have a say who runs
> the joint anyway.
>
> I am going to collate these postings and send them off to Dr Freeth for
> comment. Keep them coming.
>
> Peter
>
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