Can employee share award work?

Some companies offer their employees with share award, such as Tim Cook has been awarded millions of dollar via Apple’s share award programme. Such share award programme aims to encourage the employees to work for the best interests of the shareholders. Some people argue that share awarding programme will make executives make short term benefit based decisions rather than long term shareholders’ best interests; however, as we can see nowadays, shareholders and boardrooms are way smarter than this, they offer conditional share options instead of shares in their share awarding programmes, so executives have to make decisions based on their options’ executable dates, thus no longer making short sighted decisions.

However, even if executives who are offered share awarding programmes, does share awarding programmes work for the best interests of the companies? Yes, executives are offered share awarding programmes which make them have more incentives to work harder; however, ordinary employees are not offered these awarding programmes, and because there are so many ordinary employees, their efforts are likely to contribute more to the companies’ values. In addition, even offering these ordinary employees share awarding, it will not make too much when it is a large company having so many ordinary workers, as each individual ordinary employee is only offer a very limited number of shares/options. Even companies can offer their ordinary employees very attractive share awarding programmes, companies have to cooperate with other companies, and other companies may not be so interested in working for your best interests.

Yes, share awarding programmes can improve employees’ incentives to work for their shareholders; however, it has its limitations and does not solve all programmes.