I have a plan which will endeavour to bring a little honesty into public limited company bonuses for directors and their chairman.
And, it is so simple.
On the Balance Sheet notes, there should be a list of bonuses for each director on offer. Each director must state the criteria with which he can earn his bonus.
For example, if a director is offered a bonus of £1M he must add, in the Balance Sheet notes, what he has to do to earn it. Such as increase sales by 10%, increase share value by 15% or whatever.
It would be perfectly legal for him to say, increase company share value by a ha'penny, but remember, he has to get this past the shareholders at the AGM. He'd very quickly be voted out of his bonus.OK, the last example is a little extreme, but the idea is that if a director doesn't put a realistic aim for his bonus he may get it reduced or even cancelled by the shareholders.