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    Corporate Profitability and Executive Bonuses

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    Please help with the following problem.

    In this example, let's say corporate profitability declined 20 percent from 2008-2009. What performance percentage would you use to trigger executive bonuses for that year? Why? What issues would arise with the hiring and retaining the best managers?

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    Solution Preview

    Problem: In this example, let's say corporate profitability declined 20 percent from 2008-2009. What performance percentage would you use to trigger executive bonuses for that year? Why? What issues would arise with the hiring and retaining the best managers?

    Solution:
    The performance percentage that I will use to trigger executive bonuses for that year will be 10 percent of the net worth of the company in the middle of the fiscal year. Once the trigger point is reached the total executive bonus will be 20% of the income before tax that is earned above the trigger point.

    The reason this trigger point ...

    Solution Summary

    The response provides you a structured explanation of Executive Bonuses. It also gives you the relevant references.

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