Short survey of recent thinking by Daniel Pink
Daniel Pink, author of Drive, gives an overview of recent thinking about whether shareholder value should be the main measure of corporate success in an article in the Daily Telegraph that can be read here.
The article quotes the conclusion reached from data analysis by Roger Martin, dean of the Rotman School of Management at the University of Toronto, in his recent book Fixing the Game that “the shareholder maximisation argument is entirely theoretical rather than empirical. There is no clear data supporting the notion that making shareholder value maximisation the objective of the firm actually does maximise shareholder value over the long term”.
The article argues for the elimination of share-based compensation i.e. of share option plans. This suggestion is representative of recent trends in the structure of executive remuneration; Tesco plc recently announced that share option schemes for its executives are to be abolished, as we reported in this post.
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