Testing the Reasonability of Performance Goals
Posted by Mike Meyer on September 9, 2024 in Video
To set performance thresholds, companies can use their weighted average cost of capital as an anchor point, says Mike Meyer. Mike discusses the concept of sharing ratios in annual bonus plans and the importance of analyzing market data over multiple years. He emphasizes that while there’s no one-size-fits-all answer, these reference points provide valuable insights for committees to ensure balanced and effective incentive plans.
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