Market-based bonus schemes may be considered more appropriate from a PAT perspective in industries in which:

Question

Quizplus · Accepted Answer

Market-based bonus schemes may be more appropriate in industries where successful strategies will not be reflected in accounting profits for a number of periods. This is because a focus on accounting profits may not effectively incentivize behavior that leads to long-term success. Market-based measures, such as stock prices or market share, may be better indicators of long-term performance.

Market-Based Bonus Schemes May Be Considered More Appropriate from a PAT