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New share schemes for executives increasing

Robert Chote,Economics Correspondent
Sunday 11 September 1994 18:02 EDT
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MORE than 40 of the 100 top companies in the FT-SE index have set up extra executive share schemes running alongside conventional share option schemes as they react to pressure to hold down senior managers' basic pay, writes Robert Chote.

New Bridge Street Consultants found that the most popular vehicles were 'restricted share schemes' and equity 'partnership schemes', in which a bonus is paid according to performance measured against a pre-set target.

'Until relatively recently long- term incentive plans were predominantly cash-based,' said Carol Arrowsmith, NBSC managing director. 'But dissatisfaction with executive share option schemes has led to an upsurge in alternative share-based plans.'

A survey by Gallup shows waning enthusiasm among institutional investors for increasing holdings of British shares. Barely a third are bullish about the short-term outlook for the London stock market.

The survey of fund managers was published amid fresh reports that the Treasury is considering imposing VAT on banking and financial services.

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