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International -- Readers Report
Corporate Disclosure Is Alive and Well in Great Britain (int'l edition)
"Europe: Shine a light on executive pay" (European Business, Aug. 14) highlights the way Vodafone AirTouch PLC awarded its chief executive an apparent 10-million-pound "pat on the back" without communicating the performance criteria with sufficient clarity to those paying the bill.
Chris Gent has, in fact, delivered exceptional returns to shareholders. Vodafone ranks seventh in the FTSE 100 in delivering wealth to shareholders over the last five years. Had performance criteria for this award been communicated in advance, the company would probably not have faced such criticism.
However, I question your assertion that the level of transparency is worse in Great Britain as a whole. Disclosure has been a continuing focus of British corporate governance, and comprehensive descriptions of incentive plans are published over several pages of an annual report.
As an increasing number of companies based in Britain aim to provide world-class pay for world-class performance, their investors have insisted that increases in pay opportunity be linked to stringent performance criteria. The performance hurdle of real growth in earnings of 3% used by GlaxoSmithKline is not deemed by most British investors to be sufficiently challenging for today's "super grants" of options. As British pay levels begin to move toward those of the U.S., a contrasting model with more demanding performance criteria is emerging.
It is refreshing to see the media in Great Britain focus on pay-for-performance rather than just pay level. All too often, sensationalist reporting overlooks the important point that incentive plans can help drive up companies' performance, which is in everyone's interests.
LondonReturn to top
Putin Needs the West's Support to Get the Job Done (int'l edition)
It is often forgotten that the Industrial Revolution and the ensuing prosperity of northwest Europe and America was preceded by the Renaissance, humanism, the Protestant revolution, the Age of Reason, the Enlightenment, and the Scientific Revolution, along with sundry philosophies arguing the worth of truth and honesty ("Why Putin has to bust the bureaucrats," European Business, Aug. 14).
If Russia is ever to be a rewarding and profitable environment for European and American enterprise, Western business leaders and Western statesmen ought to do everything possible to assist Putin to rid Russia of its self-serving oligarchs, corrupt bureaucrats, and home-grown Mafia. Criticizing Putin's efforts will achieve nothing. He has a colossal job ahead of him. Support from the West could be profitable for all concerned. Positive reinforcement has been known to achieve positive results.
Frederic A.C. Lister
Nauheim, GermanyReturn to top
Cleaning Up Suzhou Creek Will Boost Quality of Life (int'l edition)
We refer to the article "Cleaning a river to enhance a city" (Letter from Shanghai, July 24). Suzhou Creek is an important waterway that passes through the urban heart of Shanghai. The creek is used to provide navigation and flood-control facilities and is a water source for irrigation and industrial processing.
While we concur with the writer that the Suzhou Creek is severely polluted with large discharges of untreated waste, we would like to point out that this contributes significantly to the degraded environment and poor living conditions that exist along the creek's banks and acts as a constraint to urban regeneration in the adjacent areas. We feel that efforts to rehabilitate the river need to be placed in this perspective.
Shanghai's highly polluted waterway will be cleaned up with the help of a financial assistance package totaling $876 million, of which the Asian Development Bank is funding $300 million. Rehabilitation of the river system will restore the environment and water quality, improve the living conditions for riverside residents, and raise public health standards for about 3 million people living in the area.
Robert H. Salamon
Chief, Office of External Relations
Asian Development Bank
Metro Manila, PhilippinesReturn to top