1 Does the reward level of top managers have an impact on the motivation of workers? Share option schemes are generally attractive to the recipients, because if the company’s shares increase in value then the directors stand to gain, but if they decrease they merely lose a potential profit opportunity. By contrast, shareholders incur genuine losses in the latter situation.

Share options fail the key test of a good incentive scheme, which is that the interests of shareholders and managers should be as closely aligned as possible.

There is a growing feeling that share incentive schemes should be reserved for exceptional performance, and not for meeting the requirements of a normal job. Also, it would appear that not enough is done to share the benefits of success throughout the workforce. However, there is an indication of some movement in this direction.