Successful Companies Compensate With Shares

Abstract

The global financial crisis has put good corporate governance practices on the radar screen of investors, politicians, and the general public. To comply with corporate governance, executive compensation in general—and long-term incentives in particular—have become increasingly important for companies. Also, calls for more sustainable company performance have emerged all around the world, and politicians have put numerous reforms on the agenda. Some of these reforms especially emphasize the role of long-term incentives for sustainable business development. By doing so, an effective tool to foster a company’s long-term growth practices can be implemented. The article sheds light on global market practice of equity-based compensation, based on the GEO Global Equity Insights 2013 study—conducted by the Global Equity Organization, together with the global blue-chip company, Siemens, and Hostettler, Kramarsch & Partner, an international consulting firm with focus on performance management and compensation. The study identifies current market practice in 133 companies, including a number of the largest global corporations, across 13 countries and 10 industries.