Compensation: Getting Executives to Create Value

Abstract

It sounds so simple: Just align executive compensation with a company's strategy—strategy being to make a profit, of course—and all with benefit. In looking at economic profit, there are several easily understandable measures of how well a company's strategy is doing: sales growth rate, incremental operating profit margin, free cash flow, cost of capital, and the ratio of return on equity to investor's required return.

Citation

Brossy, R. and Balkcom, J.E. (1994), "Compensation: Getting Executives to Create Value", Journal of Business Strategy, Vol. 15 No. 1, pp. 18-21. https://doi.org/10.1108/eb039610