4. Incentive Compensation
Aims and objectives of this chapter
• Explain the accounting issues involved in incentive compensation programs
• State the different types of cash incentive compensation plans currently in use
• Explore the prevalence of incentive compensation plans
• Discuss the various key incentive compensation metrics
• Explain the need to use sustaining financial value creation metrics
• Discuss the free cash flow measure as an incentive compensation metric
• Discuss the economic value added measure as an incentive compensation metric
• Discuss the residual income measure as an incentive compensation metric
• Discuss the use of a balance scorecard system as an incentive compensation triggering mechanism
An Introduction to Incentive ...
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