Chapter 12 discusses issues in design and use of management performance evaluation and incentive plans to motivate managers to act in the organization’s best interests. Good performance evaluation and incentive plans induce “win-win” results if they avoid incentives for fraudulent financial reporting. | Incentive Issues CHAPTER 12 PowerPoint Presentation by LuAnn Bean Professor of Accounting Florida Institute of Technology © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Managerial Accounting 11E Maher/Stickney/Weil Chapter 12: Incentive Issues CHAPTER GOAL Chapter 12 discusses issues in design and use of management performance evaluation and incentive plans to motivate managers to act in the organization’s best interests. Good performance evaluation and incentive plans induce “win-win” results if they avoid incentives for fraudulent financial reporting. ☼ ☼ Chapter 12 discusses issues in design and use of management performance evaluation and incentive plans to motivate managers to act in the organization’s best interests. Good performance evaluation and incentive . | Incentive Issues CHAPTER 12 PowerPoint Presentation by LuAnn Bean Professor of Accounting Florida Institute of Technology © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Managerial Accounting 11E Maher/Stickney/Weil Chapter 12: Incentive Issues CHAPTER GOAL Chapter 12 discusses issues in design and use of management performance evaluation and incentive plans to motivate managers to act in the organization’s best interests. Good performance evaluation and incentive plans induce “win-win” results if they avoid incentives for fraudulent financial reporting. ☼ ☼ Chapter 12 discusses issues in design and use of management performance evaluation and incentive plans to motivate managers to act in the organization’s best interests. Good performance evaluation and incentive plans induce “win-win” results if they avoid incentives for fraudulent financial reporting. The technical term for “win-win” plans of this sort is “incentive compatible compensation plans.” PAY INCENTIVES Managers receive bonuses for performance that may be based on divisional or corporate results. Bonuses may be based on annual performance or on performance over several years and may be paid immediately or deferred and spread over several years. LO 1 Managers receive bonuses for performance that may be based on divisional or corporate results. Bonuses may be based on annual performance or on performance over several years and may be paid immediately or deferred and spread over several years. What forms do divisional incentives take? Divisional incentives can be cash or profit sharing for short-term performance; stock or stock options as deferred compensation; and special awards. LO 1 MANAGERS WANT TO KNOW! How will performance be evaluated? Performance can be evaluated based on
