Quiz 20: Management Compensation, Business Analysis, and Business

Business

Business analysis Valuation and Management Compensation. Analysing the firm's future value is a critical task as prediction is depend on the future economic benefit can be generated. Firms value is important as many decisions are depend on firms computed value as it defines perception towards firm.Compensation to business manager is a important and critical task, as effective retaining of the them is essential for firm's success. Compensation involves salary, bonus, and benefits. Discussion and analysis: Three objectives of management compensation are: 1. Managers are motivated to achieve firm goal by paying them the appropriate compensation. 2. Freedom to make autonomous decision that are in accordance to the firm's goal, and providing incentives. 3. Efforts and skills of the managers should be duly recognised and rewarded for effective decision making.

Business analysis Valuation and Management Compensation. Analysing the firm's future value is a critical task as prediction is depend on the future economic benefit can be generated. Firms value is important as many decisions are depend on firms computed value as it defines perception towards firm.Compensation to business manager is a important and critical task, as effective retaining of the them is essential for firm's success. Compensation involves salary, bonus, and benefits. Discussion and analysis: Three types of management compensation are salary, bonus and perks. Salary: Salary is the basic payment which is fixed amount that a organisation pays to their managers/employees Bonus: Bonus is the extra payment that has been awarded to for either achieving the goal or performing extra work hours. They may be event based also. Perk:- Perks or benefits are the extra complimentary services provided by the company like insurance, car, medical benefits, travel etc.

Business analysis Valuation and Management Compensation. Analysing the firm's future value is a critical task as prediction is depend on the future economic benefit can be generated. Firms value is important as many decisions are depend on firms computed value as it defines perception towards firm.Compensation to business manager is a important and critical task, as effective retaining of the them is essential for firm's success. Compensation involves salary, bonus, and benefits. Discussion and analysis: When we try to avoid taking certain risk is termed as risk aversion. If a manager tends to opt for a safe option and discourages risk aversion, he may be limiting the growth of a company. Manager may be biased on the results of risk aversion, even if the end result or outcome looks positive. Compensation can be planned as such that it encourages mangers for calculated risk. For instance apart from fixed salary, a part of bonus can be depends on the new project undertaken by the mangers that support firms goal and growth.