Incentives for good performance are an essential component of remuneration. There are many systems which do this. Each organization has its own mix. Each cadre has its own needs. Incentive schemes for front line salesmen cannot be the same as for top management.

Employee share option schemes are perhaps the most complicated to understand and administer. International Financial Reporting Standard 2, “Share-based Payment”, deals with accounting aspects. Our own SECP issued the Public Companies (Employees Stock Option Scheme) Rules, 2001.

The implications of share option schemes for employers and employees and relevant issues were discussed in the Early Bird Seminar held on 13th January 2011. The speaker of the seminar was Mr. Samee-ul-Hasan, FIA, FPSA, FCII, FLMI, ASA, CEO and consulting actuary of Akhtar & Hasan (Pvt) Ltd, Actuaries. The seminar also discussed whether there are conceptual and logical flaws in lFRS 2 and the SECP’s 2001 Rules. More efficient alterative to share option schemes were also described.

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