Publications – Reward Value

Managerial and Capital Market Short Termism

Short-termism is an issue, maybe as a result of investor nearsightedness, but definitely as a result of poorly designed executive compensation. Additionally, whilst stakeholderism cannot necessarily be equated with long-termism, there may be a mismatch between societal and shareholder time preferences and/or sub-optimal long-term societal value creation due to market failures. The issues of corporate financial short-termism and societal long-term value creation (e.g. the need for climate action) thus may intersect. Corrective policy action is warranted to achieve societal first-best outcomes, but should avoid constraining investor behavior. Instead, policies targeted at facilitating and leveraging share- and stakeholder monitoring and voice, combined with executive remuneration reform seem more appropriate.

A world that works – But for whom?

Executive remuneration has become a central point in corporate governance debates and at the Annual General Meetings (AGM) of companies. Critics of executive remuneration argue that remuneration is too high and too focused on short-term shareholder value maximization, whilst disregarding environmental, social and governance (ESG) considerations.

Green Paper - Reward Value

A more balanced mix of targets, incentives and accountability can contribute significantly to achieving better societal outcomes. Together with universities and business schools, the business and investment value chain, and societal stakeholders, Reward Value works towards a new evidence-based remuneration model. As a first step to support the envisioned evidence-based nature of the new remuneration model, Reward Value and its partners have undertaken preliminary yet careful research and analysis. This green paper reflects our current line of thinking about the problem of executive compensation and options for the way forward.

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Sustainable Remuneration – Purpose Performance Pay

Where many companies have embraced the triple bottom line concept of people, planet, and profit into their purpose statements, the realisation of such statements is dependent on three different P’s: Purpose, Performance, Pay.

Establising uniformity and transparency in sustainability metrics

In order to achieve a better and more sustainable future for society and our planet, the Sustainable Development Goals (SDGs) aim to promote changes in the way we produce, consume and live. Continuing in the way we currently use our resources, deal with waste and address societal issues like inequality, will seriously harm societies and the planet in the long term. There is very little doubt about that.

Initial Research - Full Report

Reward Value and SEO Amsterdam Economics performed an extensive review of the relevant academic literature and have built a database of 4,000 companies worldwide, going back up to 25 years, analyzing the relationship between executive incentive plans and short-term financial performance as well as long-term shareholder value creation.

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Reward Value – An introduction

What is needed is a thorough review of executive remuneration practice. Reward Value intends to contribute to the development of the required changes, and acts from an analytical, factual, and independent base. Reward Value is a not-for-profit organization and involves all relevant stakeholders in the development of its recommendations.