ABSTRACT
It has been estimated that there are 350,000 managers in UK manufacturing industry, amounting to about 4 per cent of the total manufacturing labour force. On the abilities and expertise of this comparatively small number depends the prosperity of many people. Some companies overcome the problem of dilution of shareholders’ equity, inherent in any share issue scheme, by awarding notional shares to their key executives. During the half century or so during which businesses changed from being managed by owners to being managed by paid executives, methods of executive remuneration hardly changed at all. A less risky device for rewarding executives has been adopted by some companies, such as American Cyanamid, Uniroyal, and Dow Jones, by the issue of ‘restricted stock’. At Board level, 90 per cent of top American executives participated in such schemes, most of them receiving annual cash bonuses in addition.
