Roundtable: Tilting at the windmill of shareholder alignment

There are very few companies in SA where incentives are even remotely aligned with shareholder value – possible exceptions would include FirstRand where incentives are aligned to NIACC (net income after cost of capital). Generally, it appears remuneration committees and Boards seem to think if you align REM to metrics like EBITDA and Revenue growth that this is value creative without realising that these can and very often are grown while destroying value.
This lack of knowledge is remarkable as the most powerful thing one can do to improve performance is to align incentives with shareholder value – some great examples in the US such as Ball Corp and John Deere where sustainably higher returns post alignment. How are shareholders going to get alignment with management here? Michael Avery speaks to two well respected shareholder activists Chris Logan of Opportune Investments and David Holland of Fractal Value Advisors