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.