Return to Bonus

Your bonus is estimated using a three step calculation:

1. Find the net change in current and expected future profit. Current profit is defined either as corporate net operating income (NOI) or as business unit economic profit contribution (EPC), depending on where you work. Future profit is the company's implied strategic capital value added (SCVA). Your group's bonus pool is a function of changes in these two factors.

2. Multiply the bonus pool basis by your individual share factor. This factor is determined by the number of people in your group and your level of responsibility and authority within the group.

Target bonus = Bonus pool basis x Ind. share factor

3. Your target bonus may be adjusted up or down based on evaluations of your relative contribution to overall performance, both within your group and to the whole company.

© 2002 Hodak Value Advisors