The problem we hear today about investment firm managers getting bonuses after last year poor performance is because most bonus or performance based compensation plans are based on 3 to 5 years performance. As a board member I would recommend that the performance of the latest years be weighted more heavy than past years to minimize managers from making decisions that are good for the short term but bad for the long term success of business. Taking the money and running.What advice would you give to the baord of directors concering how they determine bonuses in the future ?
Bonuses should be based on qualitative data that shows the company is making more profit.
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