BusinessCompany NewsExecutive share options attacked by City guru

Executive share options attacked by City guru

The former chief executive of Hermes Pensions Management has slammed the payment of share options to senior executives for encouraging short-termism.

Link: Options muddle prompts bonanza

Alastair Ross-Goobey was reported in the FT as saying the granting of such options encouraged executives to focus on delivering short-term profitability to lift the share price, including introducing such things as cutting staff, reducing investments or research.

The consequences of this could have longer-term consequences for the company, Ross Goobey warned.

Rather, he called for a more ethical long-term approach, including rebuilding the trust between investors and chief executives.

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