Executive compensation LO6373

Keith Cowan (72212.51@compuserve.com)
02 Apr 96 15:43:57 EST

>Therefore, it appears to me that the best way to reduce the short-term
>mindset of publicly-held companies is to develop management compensation
>packages that reward long-term profit performance, and are not tied to
>stock performance.
>
>What does anyone think?
> Rol Fessenden - LL Bean - 76234.3636@compuserve.com

There is a body of thought that people come with different time horizons
(my apologies for not remembering the references but I am intuitive) and
that there are

- historical 30%
- present 30%
- future 30%
- linear 10%

and that 90% of executives get chosen because of their present tense
capabilities. Only those that happen to be linear (10 of 40% at best)
would be interested in anything to do with genuine long term future and
these would probably do it in spite of the compensation system. They would
also be the only ones likely the slightest bit interested in creating an
LO. Our challenge is to find those few and nurture their interests in the
future. Food for thought? ...Keith

-- 


Keith Cowan <72212.51@compuserve.com>
 


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