{"product_id":"the-new-standards-9780470559895","title":"The New Standards","description":"\u003cb\u003eBook Synopsis\u003c\/b\u003e\u003cbr\u003e\u003cb\u003eMake the most of the new standards\u003c\/b\u003e  \u003cp\u003eEvery year companies spend millions of dollars on executive incentives. All too often, however, these programs provide a very weak link between pay and performance, with executives potentially rewarded as much for bad decisions as they are for good ones.\u003c\/p\u003e \u003cp\u003ePacked with examples, \u003ci\u003eThe New Standards\u003c\/i\u003e insightfully discusses:\u003c\/p\u003e \u003cul\u003e \u003cli\u003e \u003cp\u003eHow to link pay with business results that create long-term value\u003c\/p\u003e \u003c\/li\u003e \u003cli\u003e \u003cp\u003eWhy incentive structures can discourage management from reasonable risk-taking, in some cases, and can enocourage imprudent risks in others\u003c\/p\u003e \u003c\/li\u003e \u003cli\u003e \u003cp\u003eThe full range of inputs that should guide proper incentive policy\u003c\/p\u003e \u003c\/li\u003e \u003cli\u003e \u003cp\u003eWhy performance measures must reflect both the quality and quantity of earnings\u003c\/p\u003e \u003c\/li\u003e \u003cli\u003e \u003cp\u003eRisk, executive behavior, and the cost of capital\u003c\/p\u003e \u003c\/li\u003e \u003cli\u003e \u003cp\u003eHow to use valuation criteria when choosing metrics\u003c\/p\u003e \u003c\/li\u003e \u003cli\u003e \u003cp\u003eThe pros and cons of common approaches to\u003cbr\u003e\u003cbr\u003e\u003cb\u003eTable of Contents\u003c\/b\u003e\u003cbr\u003e\u003c\/p\u003e\n\u003cp\u003ePreface ix\u003c\/p\u003e \u003cp\u003eAcknowledgements xv\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 1 To the CEO 1\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWell-Designed Incentives Are Governance Defined 3\u003c\/p\u003e \u003cp\u003eOld School 6\u003c\/p\u003e \u003cp\u003eAct Now 7\u003c\/p\u003e \u003cp\u003eYou Do Not Run Your Company 9\u003c\/p\u003e \u003cp\u003eThe New Standards 10\u003c\/p\u003e \u003cp\u003eIt Is Not about You 14\u003c\/p\u003e \u003cp\u003eLast Things First 16\u003c\/p\u003e \u003cp\u003eBottom Lines 17\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 2 Business Valuation and Incentive Policy 19\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Rosetta Stone 20\u003c\/p\u003e \u003cp\u003eStealing the Playbook of Business Valuation 21\u003c\/p\u003e \u003cp\u003eIncentives and Value Creation 25\u003c\/p\u003e \u003cp\u003eValue is a Function of the Quality and Quantity of Earnings 28\u003c\/p\u003e \u003cp\u003eCost of Capital and Expected Returns 30\u003c\/p\u003e \u003cp\u003eAs Long as We’re at it 32\u003c\/p\u003e \u003cp\u003eWhat Are We Paying For? 34\u003c\/p\u003e \u003cp\u003eTotal Business Return 37\u003c\/p\u003e \u003cp\u003eThe DCF Model Serves as a Proxy for Other Valuation Methods 40\u003c\/p\u003e \u003cp\u003eFree Cash flow 43\u003c\/p\u003e \u003cp\u003eFCF and the Irrelevance of Accounting Choices 45\u003c\/p\u003e \u003cp\u003eIncome and Capital: FCF’s Drivers Should Be the Main Incentive Drivers 46\u003c\/p\u003e \u003cp\u003eThe Shape of Things to Come 47\u003c\/p\u003e \u003cp\u003eQuando, Quando, Quando 49\u003c\/p\u003e \u003cp\u003eThe Past is Relevant Only as Prologue 50\u003c\/p\u003e \u003cp\u003eValuation Perspective: Operational Results, Debt, and Capital Structure 52\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 3 Market Practices in Incentive Pay 59\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eHow Much Are We Paying for Management Incentives? 64\u003c\/p\u003e \u003cp\u003eVariable Pay versus Incentive Pay 67\u003c\/p\u003e \u003cp\u003eMismatch Makers 74\u003c\/p\u003e \u003cp\u003eOther Market-Based Considerations of Market-Based Consideration 75\u003c\/p\u003e \u003cp\u003eMarket Practices and Presumptions 77\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 4 The New Standards 83\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCommon Sense 91\u003c\/p\u003e \u003cp\u003eBias is the Boil Weevil of Value Creation 92\u003c\/p\u003e \u003cp\u003eGet Cynical 93\u003c\/p\u003e \u003cp\u003eIncentivization and its Discontents 95\u003c\/p\u003e \u003cp\u003eLeading Chartcter 97\u003c\/p\u003e \u003cp\u003eGuidelines for Incentive Design 99\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 5 Risk and Executive Incentive Pay 107\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eRisk Management Policy and Incentives 108\u003c\/p\u003e \u003cp\u003eSheep in Wolves’ Clothing 113\u003c\/p\u003e \u003cp\u003eInvestors versus Management 113\u003c\/p\u003e \u003cp\u003eThe Risk Trade 115\u003c\/p\u003e \u003cp\u003eRisk and Incentive Calibration 119\u003c\/p\u003e \u003cp\u003eThe Wages of risk: Estimating the Cost of Capital 121\u003c\/p\u003e \u003cp\u003eBeta Coefficients and the Capital Asset Pricing Model 121\u003c\/p\u003e \u003cp\u003eFinancial Leverage and the Cost of Capital 123\u003c\/p\u003e \u003cp\u003eOther Methods and Evidence for Attaching a Cost to Capital 125\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 6 Motive, Means, and Method: Evaluating Incentive Performance Metrics 131\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eRole of Individual Performance in Incentive Pay 132\u003c\/p\u003e \u003cp\u003eNonfinancial Goals 133\u003c\/p\u003e \u003cp\u003eEvaluating Financial Metrics 137\u003c\/p\u003e \u003cp\u003eRevenue, Volume, and Gross Margin 138\u003c\/p\u003e \u003cp\u003eUsing Valuation Criteria to Choose Metrics 141\u003c\/p\u003e \u003cp\u003eContext for Evaluating Financial Metrics 142\u003c\/p\u003e \u003cp\u003eOperating Income, EBIT, and Return on Invested Capital 143\u003c\/p\u003e \u003cp\u003eTwo Wrongs Can Make a Right 146\u003c\/p\u003e \u003cp\u003eOn the Importance of Being Earnest 149\u003c\/p\u003e \u003cp\u003ePretax Income, Net Income, EPS, and ROE 149\u003c\/p\u003e \u003cp\u003eDebt, Share Repurchases, EPS, and Stock Price Gains 150\u003c\/p\u003e \u003cp\u003eRemedying Issues with Pretax Income, Net Income, EPS, and ROE 154\u003c\/p\u003e \u003cp\u003eCash flow Metrics 155\u003c\/p\u003e \u003cp\u003eIndexation and Immunity 158\u003c\/p\u003e \u003cp\u003eOverall Perspectives 160\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 7 Value-Based Performance Measures 163\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eValue-Based Measurement 165\u003c\/p\u003e \u003cp\u003eEconomic Profit or Economic Value Added 167\u003c\/p\u003e \u003cp\u003eUse the Metric, Lose the Rest 169\u003c\/p\u003e \u003cp\u003eTotal Business Return 170\u003c\/p\u003e \u003cp\u003eShareholder Value Added 174\u003c\/p\u003e \u003cp\u003eCash Value Added 174\u003c\/p\u003e \u003cp\u003eCash Flow Return on Investment 175\u003c\/p\u003e \u003cp\u003eReal Value Added 177\u003c\/p\u003e \u003cp\u003eCommon Values 179\u003c\/p\u003e \u003cp\u003eMetric Adjustments and Business Governance 180\u003c\/p\u003e \u003cp\u003eMetric Adjustments: Compulsories Only 185\u003c\/p\u003e \u003cp\u003eRisk-Based Capital Requirements and Return on Economic Capital 188\u003c\/p\u003e \u003cp\u003eHow Not to choose Among Value-Based Metrics 191\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 8 Ownership, Not Gamesmanship: Setting Targets and Ranges for Performance-Based Plans 195\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBest of Both Worlds 196\u003c\/p\u003e \u003cp\u003eTrifold guide to Benchmarks 197\u003c\/p\u003e \u003cp\u003eThe Past is Prologue 198\u003c\/p\u003e \u003cp\u003eNot to Insult Chimpanzees 203\u003c\/p\u003e \u003cp\u003eInterpreting the Oracle 205\u003c\/p\u003e \u003cp\u003eMultiple Personalities 206\u003c\/p\u003e \u003cp\u003eFull Reconciliation to Market Value 209\u003c\/p\u003e \u003cp\u003eSetting Targets Based on Total Business Return 215\u003c\/p\u003e \u003cp\u003eRun Away! 219\u003c\/p\u003e \u003cp\u003eRange and Domain: setting Intervals for Performance and Pay 222\u003c\/p\u003e \u003cp\u003eWeightings, Award Leverage, and Participant Influence 227\u003c\/p\u003e \u003cp\u003eIncentive Risks, Calibration, and Testing 228\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 9 Business Units and Private Companies, Phantom Stock and Performance Plans 231\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003ePrivate Companies 233\u003c\/p\u003e \u003cp\u003ePhantom Stock and Subsidiary Equity 234\u003c\/p\u003e \u003cp\u003ePhantom Stock Plan Example Using Total Business Return 235\u003c\/p\u003e \u003cp\u003eTBR Phantom Stock Grant Structure and Leverage 239\u003c\/p\u003e \u003cp\u003eDilution Guidelines and Competitive Award Levels 241\u003c\/p\u003e \u003cp\u003eValuation Approaches for the Phantom Stock Plan 242\u003c\/p\u003e \u003cp\u003eMarket Valuation Techniques 243\u003c\/p\u003e \u003cp\u003eDiscounts for Lack of Marketability and Control 244\u003c\/p\u003e \u003cp\u003eValuation Accuracy versus Incentive Efficacy 245\u003c\/p\u003e \u003cp\u003eReconciling and Funding Market Value and Formula Value 246\u003c\/p\u003e \u003cp\u003eMarket-Indexed and Performance-Based Valuation formulas 248\u003c\/p\u003e \u003cp\u003eEBITDA as a Valuation Yardstick 251\u003c\/p\u003e \u003cp\u003eEquity-Based Incentive Plans Based on Book Value 252\u003c\/p\u003e \u003cp\u003eTale of Three Cities 252\u003c\/p\u003e \u003cp\u003eAdjusting Valuation Results 253\u003c\/p\u003e \u003cp\u003ePerformance Plans 254\u003c\/p\u003e \u003cp\u003eValue-Based Incentives versus Private Equity Incentives 259\u003c\/p\u003e \u003cp\u003eWhere the Rubber Hits the Road 262\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 10 Using Stock to Create Effective Incentives 265\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eFrom the Top 266\u003c\/p\u003e \u003cp\u003eOff to the Races 269\u003c\/p\u003e \u003cp\u003ePros and Cons of Major Approaches to Stock-Based Incentive Design 271\u003c\/p\u003e \u003cp\u003eAll-In-One 273\u003c\/p\u003e \u003cp\u003eLet Them Eat Risk 275\u003c\/p\u003e \u003cp\u003ePurely Stock-Based LTI Approaches 278\u003c\/p\u003e \u003cp\u003eKeeping the Horses in the Barn 280\u003c\/p\u003e \u003cp\u003eGranting and Leverage 282\u003c\/p\u003e \u003cp\u003eEquity-Based Incentives in Venture-Stage Companies 284\u003c\/p\u003e \u003cp\u003eOwnership Effects 287\u003c\/p\u003e \u003cp\u003eA Whole New Ball Game 287\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 11 The Medium Is the Message 289\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eIncentive and Financial Governance 290\u003c\/p\u003e \u003cp\u003eHuman Resource Perspectives 293\u003c\/p\u003e \u003cp\u003eGlossary 301\u003c\/p\u003e \u003cp\u003eIndex 305\u003c\/p\u003e\n\u003c\/li\u003e\n\u003c\/ul\u003e","brand":"John Wiley \u0026 Sons Inc","offers":[{"title":"Default Title","offer_id":49402364494167,"sku":"9780470559895","price":63.0,"currency_code":"GBP","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0817\/1739\/5799\/files\/9780470559895.jpg?v=1730480180","url":"https:\/\/bookcurl.com\/products\/the-new-standards-9780470559895","provider":"Book Curl","version":"1.0","type":"link"}