Accounting-Based Incentive
- Accounting-Based Incentive
A method for compensating corporate executives based on whether they help their companies reach certain performance levels in areas such as earnings per share and return on equity. These plans are widely used and can be divided into two types: those that reward performing executives with cash and those that reward performing executives with stock. It is common for incentive pay to make up a significant portion of an executive's compensation in firms of all sizes. Executives are also compensated with a base salary and benefits.
The Journal of Managerial Issues published a study of 175 firms that adopted accounting-based incentive plans between 1971 and 1980, which showed that these firms usually rose from performing below or at industry medians to exceeding industry medians after adopting the plans. After controlling for other variables, the improvement in performance was believed to be tied to plan adoption. Other performance measures that companies commonly use to measure executive performance include cash flow, return on assets, operating income, net income and total shareholder return.
Investment dictionary.
Academic.
2012.
Look at other dictionaries:
Incentive — For the video game developer and publisher, see Incentive Software. For the independent record label, see Incentive Records. In economics and sociology, an incentive is any factor (financial or non financial) that enables or motivates a… … Wikipedia
Energy Accounting — is the hypothetical system of distribution, proposed by Technocracy Incorporated in the Technocracy Study Course , which would record the energy used to produce and distribute goods and services consumed by citizens in a Technate.… … Wikipedia
Zero-based budgeting — is a technique of planning and decision making which reverses the working process of traditional budgeting. In traditional incremental budgeting, departmental managers justify only increases over the previous year budget and what has been already … Wikipedia
Sales Incentive Plan — A Sales Incentive Plan (SIP) is a business tool used to motivate and compensate a sales professional (or Sales Agent) to meet goals or metrics over a specific period of time, usually broken into a plan for a fiscal quarter or fiscal year. A SIP… … Wikipedia
Economic Affairs — ▪ 2006 Introduction In 2005 rising U.S. deficits, tight monetary policies, and higher oil prices triggered by hurricane damage in the Gulf of Mexico were moderating influences on the world economy and on U.S. stock markets, but some other… … Universalium
Feed-in tariff — Part of a series on Green economics Concepts … Wikipedia
Value added tax — Taxation An aspect of fiscal policy … Wikipedia
Valuation (finance) — Accountancy Key concepts Accountant · Accounting period · Bookkeeping · Cash and accrual basis · Cash flow management · Chart of accounts … Wikipedia
Italy — /it l ee/, n. a republic in S Europe, comprising a peninsula S of the Alps, and Sicily, Sardinia, Elba, and other smaller islands: a kingdom 1870 1946. 57,534,088; 116,294 sq. mi. (301,200 sq. km). Cap.: Rome. Italian, Italia. * * * Italy… … Universalium
Mergers and acquisitions — Merger redirects here. For other uses, see Merge (disambiguation). For other uses of acquisition , see Acquisition (disambiguation). Accountancy Key concepts Accountant · Accounting period · Bookkeeping · Cash and accrual basis … Wikipedia
