Executive Pay For Performance Using @RISK
Traditional executive incentive plans often encourage mediocrity and in many cases lead to the destruction of shareholder value. We don't have to look far to find evidence of a company with a long-term decline in stock price and increasing executive pay packages. The issue with executive compensation is not about the amount being paid to CEOs, but rather on the measure of performance and the terms of their compensation plan.
Our Value Based Management (VBM) incentive compensation plan is designed to align management and shareholder interests, such that managers are rewarded for creating long-term shareholder value. The structure of our incentive plan simulates ownership, similar to a management buyout, however it has added advantages for both the manager and the shareholder. Our VBM plan uses @RISK's Monte Carlo Simulation as part of our analysis package. In this free live webcast, we will see why traditional compensation is a formula for mediocrity. We will also show how to create a pay for performance Compensation plan that will maximize long-term shareholder wealth by aligning management and shareholder interests. Lastly, we will demonstrate how to calibrate a pay for performance compensation plan using @RISK.