Identify at Least Four Guidelines for Creating Incentive Compensation Systems

question 73

Essay

Identify at least four guidelines for creating incentive compensation systems that link employee behavior to organizational objectives.

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Definitions:

Dividend Yield

A financial metric indicating the annual dividend payment of a company as a proportion of its share price.

Constant Growth

A model, often referred to as the Gordon Growth Model, that assumes a firm's dividends grow at a consistent rate indefinitely, used to evaluate the fair value of a stock.

Capital Gains Return

The profit realized from the sale of securities or investments which have increased in value over the time they were held.

Super-Normal Voting Rights

Voting rights that are greater than one vote per share, typically granted to certain class of shares to retain control in a company.