M2Global Technology Ltd. has a specific metric that determines CEO and managerial pay based upon a combination of financial returns, efficiency, and customer satisfaction.
Stock options with restrictions that cannot be 'cashed out' for a number of years, or forms of equity that are dependant upon long-term goals also reduces the incentive for CEOs to quickly and artificially boost stock prices. They ensure that the CEO has a real, financial stake in the long-term health of the company. There is also growing agreement that hefty, unrestricted severance packages send the wrong message to CEOs -- and golden parachutes are also highly unpopular amongst ordinary shareholders.
But as important as these incentives may be, perhaps the best prescription for success is a good choice of a CEO with a managerial style is a good 'fit' for the company culture. A CEO who wishes to succeed and foster his or her reputation...
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