Brown's Treasury has developed tax policies that encourage the granting of options or shares to workers and for them to hold those shares for extended periods.
In America grants of shares are often not tied to performance, whereas European firms generally attach performance criteria to any grant of shares, typically depending on a comparison with a peer group.
Earnings reflect compensation that ranges from base pay to bonuses as well as grants of shares and stock options.
In total Dobson received a salary of £400,000 plus a cash bonus of £2.3m, rewards which were supplemented by two separate grants of shares worth £2.14m and £500,000.
This rewards managers for staying in their jobs, but does little to encourage better long-term performance; grants of shares based on profit or revenue growth, for example, might be a better approach.
It has overhauled its management structure, tightened its financial controls, expanded its financial reporting, started paying dividends and abandoned the high-tech currency of stock options in favor of risk-free grants of shares to employees.
Mr. Wendt's employment contract covers five years and calls for the final three years to have an annual salary of $1 million, a bonus of up to $2.8 million, a grant of shares worth $1.5 million at the time and annual grants of options to buy 500,000 shares.
Whether in the form of options, the outright grant of shares, bonuses tied to criteria such as earnings or revenue growth, or some other means, pay should be explicitly aligned with the long-term interests of the owners, not short-term blips in share prices or profits.
Much better to roll out a self-satisfied businessman on Radio 4's Today programme praising the virtues of low corporation tax, which will boost his own share price and already extravagant personal remuneration closely tied to abundant grants of shares.
In September 2003 Microsoft ended its stock option program, replacing it with outright grants of shares, which aren't at the moment minting very many millionaires.
