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Informationen zum Autor Richard N. Ericson is an expert in executive compensation with Towers Watson. He has more than twenty-five years of experience in business valuation, performance standard setting, incentive design, and general executive pay consulting. Mr. Ericson holds an M.B.A. in finance from the University of Chicago. Klappentext Make the most of the new standardsEvery year companies spend millions of dollars on executive incentives. All too often, however, these programs provide a very weak link between pay and performance, with executives potentially rewarded as much for bad decisions as they are for good ones.Packed with examples, The New Standards insightfully discusses:* How to link pay with business results that create long-term value* Why incentive structures can discourage management from reasonable risk-taking, in some cases, and can enocourage imprudent risks in others* The full range of inputs that should guide proper incentive policy* Why performance measures must reflect both the quality and quantity of earnings* Risk, executive behavior, and the cost of capital* How to use valuation criteria when choosing metrics* The pros and cons of common approaches to stock-based incentive payWritten by noted compensation expert Richard Ericson, this innovative book is a must-read for directors and management concerned with executive compensation design or financial performance measurement and forecasting. Get the guidance and concrete solutions you need to thoroughly reexamine your executive compensation policies and practices with the principles and financial maxims found in The New Standards. Zusammenfassung * The information in the book will contain up to date market data, many more how-to examples. * It will be responsive to high-profile problems that companies are having with incentives, market conditions and performance standards at the top levels of management. Inhaltsverzeichnis Preface ix Acknowledgements xv Chapter 1 To the CEO 1 Well-Designed Incentives Are Governance Defined 3 Old School 6 Act Now 7 You Do Not Run Your Company 9 The New Standards 10 It Is Not about You 14 Last Things First 16 Bottom Lines 17 Chapter 2 Business Valuation and Incentive Policy 19 The Rosetta Stone 20 Stealing the Playbook of Business Valuation 21 Incentives and Value Creation 25 Value is a Function of the Quality and Quantity of Earnings 28 Cost of Capital and Expected Returns 30 As Long as We're at it 32 What Are We Paying For? 34 Total Business Return 37 The DCF Model Serves as a Proxy for Other Valuation Methods 40 Free Cash flow 43 FCF and the Irrelevance of Accounting Choices 45 Income and Capital: FCF's Drivers Should Be the Main Incentive Drivers 46 The Shape of Things to Come 47 Quando, Quando, Quando 49 The Past is Relevant Only as Prologue 50 Valuation Perspective: Operational Results, Debt, and Capital Structure 52 Chapter 3 Market Practices in Incentive Pay 59 How Much Are We Paying for Management Incentives? 64 Variable Pay versus Incentive Pay 67 Mismatch Makers 74 Other Market-Based Considerations of Market-Based Consideration 75 Market Practices and Presumptions 77 Chapter 4 The New Standards 83 Common Sense 91 Bias is the Boil Weevil of Value Creation 92 Get Cynical 93 Incentivization and its Discontents 95 Leading Chartcter 97 Guidelines for Incentive Design 99 Chapter 5 Risk and Executive Incentive Pay 107 Risk Management Policy and Incentives 108 Sheep in Wolves' Clothing 113 Investors versus Management 113 The Risk Trade 115 Risk and Incentive Calibration 119 The Wages of r...
