Abstract

This article addresses the following key points: The incentive bonus component of CEO compensation programs is usually pegged to a performance measurement, such as the company's ROE, ROA, EPS, or some other internal benchmark. It may be more relevant when computing the bonus to compare the performance of the company's stock price relative to the stock price movement of a universe of similar companies. To more closely align the CEO's interests with those of the shareholders, the incentive bonus should be subject to a claw-back provision in the event of underperformance.

Full Text
Published version (Free)

Talk to us

Join us for a 30 min session where you can share your feedback and ask us any queries you have

Schedule a call