Allied Electronics Corporation Ltd: Linking Compensation to Sustainability Metrics

Posted: 14 Mar 2012

See all articles by Robert G. Eccles

Robert G. Eccles

University of Oxford - Said Business School

George Serafeim

Harvard University - Harvard Business School

Xin Li

affiliation not provided to SSRN

Alan Knight

affiliation not provided to SSRN

Date Written: November 8, 2011

Abstract

Robert Venter, second-generation Chief Executive (CE) of family-owned Allied Electronics Corporation Ltd (Altron), considered the pros and cons of more clearly linking the firm's compensation system to sustainability performance. In June 2011, Altron, a conglomerate headquartered in Johannesburg, South Africa, controlled more than 200 companies in Africa, Europe, the US, the UK, Australia, and the Far East. More than 14,000 employees designed, developed, manufactured, and marketed a range of telecommunications, electronics, power electronics, and information technology systems and products. Having made a clear commitment to sustainable development, Venter was confident that the commitment was shared across the senior management team. However, there appeared to be more acceptance in the operating units for meeting financial targets than for meeting sustainability targets. Did the existing incentive structure send the correct message about the sustainability-oriented corporate strategy? Looking at the reshaped strategic themes, Venter considered the pros and cons of more clearly linking the firm's compensation system to sustainability performance.

Learning Objective: The purpose of this case is to discuss the rate of compensation in implementing a sustainable strategy.

Suggested Citation

Eccles, Robert G. and Serafeim, George and Li, Xin and Knight, Alan, Allied Electronics Corporation Ltd: Linking Compensation to Sustainability Metrics (November 8, 2011). Harvard Business School Accounting & Management Unit Case No. 412-075. Available at SSRN: https://ssrn.com/abstract=2021382

Robert G. Eccles (Contact Author)

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

George Serafeim

Harvard University - Harvard Business School ( email )

381 Morgan Hall
Boston, MA 02163
United States

HOME PAGE: http://goo.gl/q4cJ5A

Xin Li

affiliation not provided to SSRN ( email )

Alan Knight

affiliation not provided to SSRN ( email )

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