
In a Real Business article about his recent focus on the SME space, Woodford said: “I’ve been investing in early-stage businesses for the best part of 20 years and unquoted businesses for ten years, and I’ve learned a hell of a lot. What became very clear is that we have an amazing untapped opportunity here. Valuations of companies in this space are on the floor.”
But it seems he learned more than he initially let on, now suggesting that he’s axed staff bonuses as they encourage “short-term decision making and wrong behaviours”. Instead, the company raised employees’ base salaries, claiming that it would help staff focus more on long-term returns. Explaining the move, the group’s co-founder, Craig Newman, said there was little correlation between bonus and performance – and that it was backed by academic evidence. One such piece of research is entitled “Killing Conscience: The Unintended Behavioural Consequences of Pay for Performance.” As its number one example, the report highlights how in 2009 Swiss bank UBS agreed to pay the US government $780,000,000 to settle charges it procured for helping citizens evade tax laws. The case, still described as one of the largest tax fraud investigations in history, began when banker Bradley Birkenfeld agreed to help the government in return for pleading guilty on a single count of conspiracy.- Rothschild, Woodford and Numis signify two giant steps for equity crowdfunding
- Crowdfunding firm Seedrs valued at £30m following £10m Woodford-led investment
- Andy Murray backs 2015 Everline Future 50 Disruptor of the Year CommuterClub
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