172 The Financial Times Guide to Corporate Valuation
Incentive programmes
Creating an incentive system based on maximizing shareholder value is an
integral part of VBM. ‘What you measure and reward gets done.’ In other
words, if incentives are linked to net sales, focus will be on net sales, if
they are linked to net result, focus will be on net result and if linked to the
share price, time will be spent checking the stock quote. So, if you want to
maximize the value of the corporation, you need a motivation and com-
pensation programme that is linked to maximizing company value – for as
many employees as practically possible.
Every business faces the question of how best to motivate and reward
its employees in order to retain