“Do companies include profit targets as part of their bonus arrangements for management who are below Executive Director, or Executive Committee level? If so, how do those companies communicate profit performance against target/budget/plan, bearing in mind the potential need to disclose publically inside information?”
Our cash bonus scheme incudes a profit element for all Hay Grade employees (from exec directors to administrators) which is based on company performance (only the % of salary paid as bonus changes with seniority). The bonus result for any given year is communicated to the wider community only after our prelims have been published
We have profit related bonuses for the top 50 employees below board level, with a smaller part of the bonus linked to personal objectives. Profit performance is tracked solely against publicly available data from our interim and annual results post announcement. Payments are made post results announcement.
We do, as part of a balanced corporate scorecard (BCS). The profit and other financial targets are included on the BCS which is reviewed throughout the year by the Board. and it leads to an overall score, which does not require disclosure of the specific targets. We have a slightly different version of the BCS which is shared with management generally throughout the year. This excludes the profit targets. Management understand that it is only an indication of scorecard trend throughout the year. The full BCS score is only made known to management as a whole after the preliminary results announcement, and bonus is paid the following month.
Leave a Reply