GUEST: Diane Hay
                    Senior Official, HM Revenue and Customs
 FEBRUARY 2007

Effective Share Plans:  I Know It When I See It (I Think)

The continued scrutiny of share plans has been heightened by the recent option backdating disclosures in the US and ongoing criticism of executive pay worldwide.  Despite the success of shareholder activists in pressuring companies to reduce run rates and conform share plan design to their standards, shareholders continue to question what they are getting in return for dilution.  Pressures to move away from standard options to performance features and performance-based full value plans fuel this debate.  How do we know if a share plan is “working” for the shareholders?  What are they, really, getting in return?  Are we changing behavior or just delivering pay?  Fred discusses the notion of share plan effectiveness with Diane Hay, GEO Award Judge and former head of ProShare.

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