Board pay is always in the headlines. The FRC has just published the new Corporate Governance Code and Guidance on Board Effectiveness, implementing many of the government’s proposed reforms, so focus on pay is only likely to increase. To get an expert’s view, we spoke to Alex Edmans, Professor of Finance at London Business School, about issues surrounding executive pay.

Alex has recently been appointed by the UK Government to analyse the link between share buy backs and executive pay. Alex looks at this issue in our discussion. Alex then suggests that long term incentives are problematic because they are still tied to short term targets. He considers that a better outcome would be to have instead share awards with long holding periods, including post-employment, as long term share values best reflect a company’s performance. Alex would like to change the debate about executive pay away from quantum, towards encouraging executives to invest in innovation and training for long term company success.

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