I read with interest the article in a recent Sunday Times (Business section) “Bosses: Is the Party Over?” by Ben Laurance. The article was about Neil Woodford of The Woodford Patient Capital Trust, who after many years of paying bonuses to his fund managers has decided to scrap them altogether. Woodford is compensating his team members with a rise in base pay. The question is “Will these actions enhance or discourage performance”?
Woodford believes there is very little correlation between bonus and performance, which can lead to short term decision-making and wrong behaviours.