And ultimately, that's for the board and investors to decide/influence.
Yes and no. The problem is, the executive is doing the work now, not in 5 or 10 years, and they're probably going to expect something for their efforts. If you delay too much of their compensation into the future, they'll get fed up and go work for another company that doesn't do it that way.
You could pay them up front with a clause that, if the company falters in some time frame, the executive (whether currently employed or not) owes some portion of the money back to the company--but there's no guarantee that you'll be able to collect from them. The executive could be dead, bankrupt, or have left the country.
And what if the economy blows up for some unrelated reason in five years, or some other external disaster strikes? Suddenly the company is doing terribly through no real fault of the executive, who is now stuck with not only having to find work in bad conditions but suddenly not getting paid for work he did over the last five years. What sensible executive is going to want to take that risk?
In general, there tends to be an incentive to push executive rewards closer to the short term, despite how much sense it seems to make that it should be the long-term view that matters, and regardless of how the shareholders may personally feel about it.
Yes and no. The problem is, the executive is doing the work now, not in 5 or 10 years, and they're probably going to expect something for their efforts. If you delay too much of their compensation into the future, they'll get fed up and go work for another company that doesn't do it that way.
You could pay them up front with a clause that, if the company falters in some time frame, the executive (whether currently employed or not) owes some portion of the money back to the company--but there's no guarantee that you'll be able to collect from them. The executive could be dead, bankrupt, or have left the country.
And what if the economy blows up for some unrelated reason in five years, or some other external disaster strikes? Suddenly the company is doing terribly through no real fault of the executive, who is now stuck with not only having to find work in bad conditions but suddenly not getting paid for work he did over the last five years. What sensible executive is going to want to take that risk?
In general, there tends to be an incentive to push executive rewards closer to the short term, despite how much sense it seems to make that it should be the long-term view that matters, and regardless of how the shareholders may personally feel about it.