Remuneration: Wrong incentives, wrong result?

To be honest, I rarely pay much attention to executive remuneration. I know it’s been garnering a lot of attention lately, but the topic is just so darn boring. As a company analyst, I’ve precious little interest in wading through the minutiae of remuneration reports. I’m sure companies make their reports deliberately complex to confuse shareholders. Still, there are two aspects of executive remuneration that get my goat. The first source of irritation is companies that change the remuneration goalposts. Take Wesfarmers. In 2008 the company set a hurdle of a return on equity (ROE) of 12.5% before managing director...

To be honest, I rarely pay much attention to executive remuneration. I know it’s been garnering a lot of attention lately, but the topic is just so darn boring. As a company analyst, I’ve precious little interest in wading through the minutiae of remuneration reports. I’m sure companies make their reports deliberately complex to confuse shareholders.

Still, there are two aspects of executive remuneration that get my goat. The first source of irritation is companies that change the remuneration goalposts.

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