CEOs told to buy shares in their own companies

CEOs at the Netherlands’ 50 biggest companies are increasingly being required to build up a minimum package of shares in their company, the Financieele Dagblad reports.

For example, if they cannot reach a stake of say four times their basic salary via bonus shares, they are being required to buy more.
CEOs at seven companies are being required to by shares by their company remuneration committees over the past two years: Reed Elsevier, Akzo Nobel, Shell, Unilever, BinkBank, Logica and Mediq.

Fair play

The reason for the compulsory share purchase is to bring executive interests into line with that of shareholders, the paper says.
‘This is a way to create value and balance all the different interests,’ Jan Maarten Slagter, head of the shareholders lobby group VEB said in a reaction. ‘They are hit in their own pockets.’
For example, Unilever CEO has been given four years to build up a stake of four times his basic €1m salary.

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