Executives are not coin-based. They cannot allocate 5 per cent of their time to one cause, 15 per cent to another and 20 per cent to another, just because their board has set up the remuneration structure that way.
Instead, boards have to decide what is core and set short- and long-term incentives accordingly. What is core to shareholders, group strategy and its short- and long-term value creation? What do they want the executives to prioritise? That’s one of the most important jobs for company boards.
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Anthony Macdonald is a Chanticleer columnist. He is a former Street Talk co-editor and has 10 years' experience as a business journalist and worked at PwC, auditing and advising financial services companies. Connect with Anthony on Twitter. Email Anthony at a.macdonald@afr.com
