Incentive plans usually tie management compensation to ________.

Question

Quizplus · Accepted Answer

Incentive plans are designed to encourage management to work towards the company's goals and objectives. In most cases, these plans link management compensation to financial performance, such as an increase in share price. This approach aligns the interests of the management team with those of the shareholders, who benefit from the company's financial success. Dividends and coupon payments are not typically used as metrics in incentive plans, while inventory turnover may be more relevant for operational performance evaluations rather than management compensation.

Incentive Plans Usually Tie Management Compensation to ________