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Post by Rishi Sun Dec 01, 2013 11:15 am

The most common long-term metrics boards used in evaluating performance were total shareholders returns (TSR), earnings (earnings per share and net income), and revenue. TSR was the most popular of these metrics and understandably so, as it directly links compensation to improvement in shareholder value. Earnings and revenue, however, are by nature shorter-term metrics; in fact, they were the most common benchmarks used to award annual stock benefits. Longer-term targets that put a premium on innovation and value creation, the true drivers of long-run stock performance, would better benefit shareholders.


http://www.enlightresearch.com/insights/2013/7/11/aligning-ceo-and-shareholder-incentives.html

>>>> Why is he contradicting what he said in the first sentence?

Are Earnings and revenues short term metrics or not?

Rishi

Posts : 5129
Join date : 2011-09-02

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