Advertisement
Accounting for Long-Term Incentive Plans: A Comprehensive Guide
Author: Dr. Evelyn Reed, CPA, CFA, is a Professor of Accounting at the University of California, Berkeley, specializing in executive compensation and financial reporting. Her research has been published in leading accounting journals, and she serves as a consultant to numerous Fortune 500 companies on accounting for long-term incentive plans.
Publisher: This report is published by the Institute of Management Accountants (IMA), a globally recognized organization providing certifications, research, and resources for management accountants. The IMA’s credibility in the field of accounting and financial management is well-established, making it a trusted source for information on complex accounting topics such as accounting for long-term incentive plans.
Editor: Dr. Michael Davis, CMA, CPA, a seasoned accounting professional with over 20 years of experience in financial reporting, including extensive expertise in the nuances of accounting for long-term incentive plans (LTIPs). His experience encompasses both public and private sectors, providing a comprehensive understanding of the practical implications of relevant accounting standards.
Keywords: accounting for long-term incentive plans, LTIPs, executive compensation, stock options, restricted stock, performance-based compensation, IFRS 2, ASC 718, share-based payment, employee stock options, deferred compensation
1. Introduction: The Complexity of Accounting for Long-Term Incentive Plans
Accounting for long-term incentive plans (LTIPs) presents significant challenges due to their multifaceted nature. These plans, designed to attract and retain key employees, often involve complex instruments and performance conditions. Accurate accounting for these plans is critical for ensuring financial statement reliability and providing investors with a clear picture of a company's financial position and performance. This report delves into the intricacies of accounting for LTIPs under both US Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). Specifically, we will examine the key accounting standards, valuation methodologies, and disclosure requirements. Proper accounting for long-term incentive plans is crucial for maintaining financial statement integrity and investor confidence.
2. Key Accounting Standards: ASC 718 and IFRS 2
In the US, Accounting Standards Codification (ASC) 718, Compensation—Stock Compensation, governs the accounting for share-based payments, including LTIPs. Under ASC 718, companies must recognize compensation expense over the vesting period of the award, reflecting the fair value of the award at the grant date. This requires complex valuation models that consider factors such as the volatility of the company's stock price, expected dividends, and the probability of vesting.
Internationally, IFRS 2, Share-based Payment, provides similar guidance. While the core principles align with ASC 718, there are subtle differences in implementation and interpretation that can lead to variations in reported financial results. Understanding the nuances of both ASC 718 and IFRS 2 is essential for multinational corporations navigating the complexities of accounting for long-term incentive plans across jurisdictions.
3. Valuation Methods for Long-Term Incentive Plans
Determining the fair value of LTIPs is a crucial step in accounting for these plans. Several valuation methods exist, each with its own strengths and weaknesses. The most commonly used methods include:
Black-Scholes Model: A widely used option-pricing model that considers factors such as stock price volatility, risk-free interest rate, time to maturity, and expected dividends. However, its application can be challenging for non-standard LTIPs.
Binomial or Trinomial Models: These models provide more flexibility than the Black-Scholes model, particularly when dealing with complex features such as performance conditions.
Monte Carlo Simulation: This sophisticated method allows for the incorporation of a wide range of factors and uncertainties, providing a more comprehensive valuation, but it's computationally intensive.
Option Pricing Models with Adjustments for Performance Conditions: These models require careful consideration of the probability of achieving the performance targets and the impact of these conditions on the option's value. This is a complex aspect of accounting for long-term incentive plans.
The choice of valuation method depends on the specific characteristics of the LTIP and the level of complexity involved. The selection must be justified and consistently applied.
4. Accounting for Performance-Based LTIPs
Many LTIPs are contingent on the achievement of specific performance goals. Accounting for these performance-based plans is significantly more complex than accounting for plans with no performance conditions. The probability of achieving the performance goals must be estimated, and the valuation must reflect this probability. Companies often use probabilistic models or simulations to determine the expected value of the award, considering various scenarios and their likelihood. This is a key challenge in accurate accounting for long-term incentive plans.
5. Disclosure Requirements
Comprehensive disclosures are essential for transparency and to ensure that investors have the necessary information to understand the impact of LTIPs on a company's financial statements. These disclosures typically include details about the nature of the plans, the number of awards granted, the fair value of the awards, and the expected expense over the vesting period. Adequate disclosure is critical for proper accounting for long-term incentive plans and enhances the reliability of financial reporting.
6. Practical Implications and Challenges
Implementing accurate accounting for long-term incentive plans presents several practical challenges:
Estimating Probability of Vesting: Accurately forecasting the likelihood of achieving performance-based targets requires sophisticated modeling and judgment.
Volatility of Underlying Asset: Fluctuations in the company's stock price can significantly impact the fair value of the awards, creating volatility in compensation expense.
Complexity of Valuation Models: The use of complex valuation models requires specialized expertise and can lead to inconsistencies if not applied properly.
Proper accounting for long-term incentive plans requires careful planning, expertise, and consistent application of accounting standards.
7. Conclusion
Accounting for long-term incentive plans is a critical aspect of financial reporting that requires a deep understanding of relevant accounting standards, valuation methodologies, and disclosure requirements. The complexities involved necessitate careful planning, appropriate expertise, and consistent application of the chosen methods. By ensuring accurate and transparent accounting for LTIPs, companies can maintain the integrity of their financial statements and build trust with investors. Accurate accounting for long-term incentive plans is paramount for financial transparency and reliable financial reporting.
FAQs
1. What is the difference between ASC 718 and IFRS 2? While both standards address share-based payments, they differ in certain aspects of implementation and interpretation, particularly regarding valuation methodologies and disclosure requirements.
2. How are performance-based LTIPs valued? Performance-based LTIPs require estimating the probability of achieving the performance conditions and incorporating this probability into the valuation model.
3. What are the key disclosure requirements for LTIPs? Disclosures should include details on the type of plan, number of awards, fair value, and expense recognition over the vesting period.
4. What are the potential risks of inaccurate accounting for LTIPs? Inaccurate accounting can lead to misstated financial statements, investor distrust, and potential regulatory penalties.
5. What are some common valuation models used for LTIPs? Common models include Black-Scholes, binomial, trinomial, and Monte Carlo simulations, each with its own advantages and limitations.
6. How do changes in stock price affect the accounting for LTIPs? Stock price volatility directly impacts the fair value of equity-based awards, resulting in fluctuations in compensation expense.
7. What role does internal control play in accounting for LTIPs? Robust internal controls are crucial for ensuring the accuracy and reliability of the valuation process and related disclosures.
8. What are the implications of non-compliance with accounting standards for LTIPs? Non-compliance can result in financial statement restatements, regulatory fines, and reputational damage.
9. Where can I find further resources on accounting for LTIPs? Professional accounting bodies like the IMA and the Financial Accounting Standards Board (FASB) offer extensive resources and guidance.
Related Articles:
1. "The Impact of Stock Option Expensing on Firm Value": This article examines the empirical evidence on the effect of accounting for stock options on company valuations.
2. "A Comparative Analysis of ASC 718 and IFRS 2": This study compares and contrasts the key provisions of US GAAP and IFRS for share-based payments.
3. "Valuation Techniques for Performance-Based Stock Options": This article reviews different valuation methodologies specifically tailored for performance-based LTIPs.
4. "The Role of Internal Controls in Share-Based Payment Accounting": This piece focuses on the importance of internal control frameworks in ensuring the accuracy of accounting for LTIPs.
5. "Disclosure Practices for Long-Term Incentive Plans: A Global Perspective": This article examines disclosure practices for LTIPs across different jurisdictions.
6. "The Implications of Volatility on the Valuation of LTIPs": This paper explores the effect of stock price volatility on the fair value of LTIPs.
7. "Accounting for Non-Vested Stock Options under ASC 718": This article delves into the specific accounting treatment of non-vested stock options.
8. "Case Studies in Accounting for Complex LTIPs": This resource presents real-world examples of accounting for intricate LTIP structures.
9. "The Future of Accounting for Long-Term Incentive Plans": This article discusses potential changes and evolving trends in accounting for LTIPs.
| accounting for long term incentive plans: FRS 102 , 2015 |
| accounting for long term incentive plans: Handbook of Human Resources Management Matthias Zeuch, 2016-05-09 Human Resources topics are gaining more and more strategic importance in modern business management. Only those companies that find the right answers to the following questions have a sustainable basis for their future success: - How can we attract and select the right talent for our teams? - How can we develop the skills and behaviors which are key for our business? - How can we engage and retain the talent we need for our future? While most other management disciplines have their standards and procedures, Human Resources still lacks a broadly accepted basis for its work. - operational perspective Both the structured collection of reflected real-life experience and the multi-perspective view support readers in making informed and well-balanced decisions. With this handbook, Springer provides a landmark reference work on today’s HR management, based on the combined experience of more than 50 globally selected HR leaders and HR experts. Rather than theoretical discussions about definitions, the handbook focuses on sharing practical experience and lessons learned from the most relevant business perspectives: - cultural / emotional perspective - economic perspective - risk perspective |
| accounting for long term incentive plans: The Complete Guide to Executive Compensation Bruce R. Ellig, 2001-11-22 Strategies for gaining a powerful edge in the executive talent wars The competition for executive talent is fierce, making it imperative that executive compensation programs become an integral part of every company's strategic business plan. The Complete Guide to Executive Compensation provides in-depth coverage of current issues and trends in designing and administering executive compensation packages that are strategically, economically, and culturally sound. Renowned compensation and benefit expert Bruce Ellig begins by providing guidance for board members and company executives on defining a company's organization, culture, and business strategy, in order to establish a framework for executive compensation. He then discusses the often difficultbut essentialissues within that framework, including: Pay positioningrelative to the competitive environment Risk profilethe mix of salary, incentive compensation, and benefits Leveragethe relationship between incentive plan payouts and performance Timingthe mix of short- versus long-term incentive programs Incentive plan designobjectives, performance measures, and participation |
| accounting for long term incentive plans: IFRS 2 International Accounting Standards Board, 2004 |
| accounting for long term incentive plans: An Introduction to Executive Compensation Steven Balsam, 2002 General readers have no idea why people should care about what executives are paid and why they are paid the way they are. That's the reason that The Wall Street Journal, Fortune, Forbes, and other popular and practitioner publications have regular coverage on them. This book not only proposes a reason - executives need incentives in order to maximize firm value (economists call this agency theory) - it also describes the nature and design of executive compensation practices. Those incentives can take the form of benefits (salary, stock options), or prerquisites (reflecting the status of the executive within the organizational culture. |
| accounting for long term incentive plans: Accountants' Handbook, Financial Accounting and General Topics D. R. Carmichael, Lynford Graham, 2012-06-05 This highly regarded reference is relied on by a considerable part of the accounting profession in their day-to-day work. This comprehensive resource is widely recognized and relied on as a single reference source that provides answers to all reasonable questions on accounting and financial reporting asked by accountants, auditors, bankers, lawyers, financial analysts, and other preparers and users of accounting information. The new edition reflects the new FASB Codification, and includes expanded coverage of fair value and guidance on developing fair value estimates, fraud risk and exposure, healthcare, and IFRS. |
| accounting for long term incentive plans: In the Matter of Representative Charles B. Rangel United States. Congress. House. Committee on Standards of Official Conduct, 2010 |
| accounting for long term incentive plans: Manual of Accounting Narrative Reporting 2014 PwC, 2013-01-01 UK companies are governed by legal and other regulatory requirements impacting elements of financial statements that are common to users of both IFRS and UK GAAP. These are often referred to as the 'front half' of the financial statements. This publication contains the guidance applicable to all UK companies regardless of the GAAP under which their financial statements are prepared.Written by PwC's UK Assurance Risk and Quality team, the manual includes practical advice based on PwC's work advising clients, partners and staff. The book will be of particular interest to finance directors, accountants, legal practitioners, company administrators, financial advisors and auditors.This year's edition provides guidance for UK quoted companies on the 'front half' of financial statements, including many illustrations and examples. Key updates from previous edition include: Updated guidance for new external guidance and legislation includingFRC UK Corporate governance code and 2013 Statutory instruments regulations New real-life examples from accounts |
| accounting for long term incentive plans: Accountants' Handbook, Volume 1 D. R. Carmichael, O. Ray Whittington, Lynford Graham, 2007-06-04 This highly regarded reference is relied on by a considerable part of the accounting profession in their day-to-day work. This handbook is the first place many accountants look to find answers to practice questions. Its comprehensive scope is widely recognized and relied on. It is designed as a single reference source that provides answers to all reasonable questions on accounting and financial reporting asked by accountants, auditors, bankers, lawyers, financial analysts, and other preparers and users of accounting information. |
| accounting for long term incentive plans: Paying for Performance Peter T. Chingos, 2002-10-15 An up-to-date, revised edition of the complete, practical guide to designing and implementing effective compensation plans A compensation package should be more than just the means to attract and retain talented executives. The right kind of plan can give your company a powerful strategic advantage. In Paying for Performance, Second Edition, consultants at Mercer Human Resource Consulting, Inc., one of the world's leading human resources consulting firms, give you the tools and techniques you need to design and implement a highly effective compensation program that will sharpen your company's competitive edge for years to come. The book also shows you how to understand shareholder expectations, government regulation, and a host of business and human resources issues. Paying for Performance, Second Edition: * Describes best practices used at America's top-performing companies * Offers proven pay-for-performance tools for addressing current and future pay issues * Uses case studies drawn from extensive Mercer Human Resource Consulting, Inc. research * Addresses the special issues affecting pay-for-performance in not-for-profits * Presents expert advice on managing talent and competencies to maximize performance * Addresses the regulatory issues that affect executive compensation * Covers everything from base pay to annual and long-term compensation |
| accounting for long term incentive plans: Pay Without Performance Lucian A. Bebchuk, Jesse M. Fried, 2004 The company is under-performing, its share price is trailing, and the CEO gets...a multi-million-dollar raise. This story is familiar, for good reason: as this book clearly demonstrates, structural flaws in corporate governance have produced widespread distortions in executive pay. Pay without Performance presents a disconcerting portrait of managers' influence over their own pay--and of a governance system that must fundamentally change if firms are to be managed in the interest of shareholders. Lucian Bebchuk and Jesse Fried demonstrate that corporate boards have persistently failed to negotiate at arm's length with the executives they are meant to oversee. They give a richly detailed account of how pay practices--from option plans to retirement benefits--have decoupled compensation from performance and have camouflaged both the amount and performance-insensitivity of pay. Executives' unwonted influence over their compensation has hurt shareholders by increasing pay levels and, even more importantly, by leading to practices that dilute and distort managers' incentives. This book identifies basic problems with our current reliance on boards as guardians of shareholder interests. And the solution, the authors argue, is not merely to make these boards more independent of executives as recent reforms attempt to do. Rather, boards should also be made more dependent on shareholders by eliminating the arrangements that entrench directors and insulate them from their shareholders. A powerful critique of executive compensation and corporate governance, Pay without Performance points the way to restoring corporate integrity and improving corporate performance. |
| accounting for long term incentive plans: Accounting Principles for Non-Executive Directors Peter Holgate, Elizabeth Buckley, 2009-03-05 A clear, jargon-free explanation of the key elements behind a listed company's annual report and accounts. |
| accounting for long term incentive plans: Essential Account Planning Mark Donnolo, 2017-05-23 Sales growth starts with planning Sales accounts are harder than ever to win, let alone keep. Globalization, cloud computing, and crowdsourcing create a marketplace where any account can be lured away by a hungry startup. And the face-time advantage? Forget it. Today's high-quality sale will likely involve six or more decision makers. That's why it's time to get strategic about how sales teams frame their approach. In Essential Account Planning, sales enablement expert Mark Donnolo blends his years of experience with expert interviews and stories to show you how planning can reliably drive revenue. His five-point framework will prepare you to address the arguments you're certain to hear against account planning, such as lack of commitment, ownership, and time. Each sales organization is unique, but most have similar challenges and succeed using common principles. And chances are, sales reps in your company already perform many of these account planning tasks, albeit on the fly or independent of others. This book's ready-to-use tools and templates will help you get everyone on the same page to deliver immediate results. In this book, you'll learn how to: Develop a consistent account plan structure. Create the habits and culture of an ongoing planning process. Navigate the politics that impede information sharing. Many salespeople believe that more selling creates more sales, but the salespeople who invest in account planning become the true sales leaders. Use Essential Account Planning to bring stability to your sales organization and start seeing the rewards of planning today! |
| accounting for long term incentive plans: EBOOK: Accounting: What the Numbers Mean MARSHALL, 2016-01-08 EBOOK: Accounting: What the Numbers Mean |
| accounting for long term incentive plans: Drilling Down: Turning Customer Data into Profits with a Spreadsheet Jim Novo, 2004-06-18 I spend a lot of time in marketing-oriented discussion lists. If you do, you probably also sense the incredible frustration of people who keep asking about using their customer data to retain customers and increase profits. Everybody knows they should be doing it, but can't find out how to do it. Consultants and agencies make this process sound like some kind of black magic, something you can't possibly do yourself. I disagree. I think the average business owner can do a perfectly decent job creating profiles and using them to retain customers and drive profits. Thus the book. The examples provided are Internet specific, but the methods can be used in any business where customer data is available. This book is about the down-and-dirty, nitty-gritty art of taking chunks of data generated by your customers and making sense of it, getting it to speak to you, creating insight into what types of marketing or general business actions you can take to make your business more profitable. We'll be talking about action-oriented ideas you can generate on your own to drive sales and profits, ideas that will reveal themselves by analyzing your own customer data, using only a spreadsheet. We have all heard how important it is to collect customer data, to know your customer. What I don't hear much about is what exactly you DO with all that data once you have collected it. How is it used? What exactly is Drilling Down into the data supposed to tell me, and what am I looking for when I get there? For that matter, what data should I be collecting and how will I use it when I have it? And how much is this process going to cost me? The following list outlines what you will learn and be able to do after reading the Drilling Down book: --What data is important to collect about a customer and what data is not --How to create action-oriented customer profiles with an Excel spreadsheet --How to use these profiles to plan marketing promotions --How to use these profiles to define the future value of your customers --How to use these profiles to measure the general health of your business --How to use these profiles to encourage customers to do what you want them to --How to predict when a customer is about to defect and leave you --How to increase your profits while decreasing your marketing costs --How to design high ROI (Return on Investment) marketing promotions How to blow away investors with predictions of the future profitability of your business Table of Contents Chapter 1: What's a Customer Profile? Chapter 2: Data-Driven Marketing - Customer Retention Basics Chapter 3: The Language of Data, The Science of Profit Chapter 4: Interactivity Changes the Rules of the Game Chapter 5: How to Build a Customer Profiling Spreadsheet Chapter 6: How to Profile (Score) Your Customers Chapter 7: Marketing Using Customer Scores - Basic Approach Chapter 8: Using Customer Characteristics and Multiple Scores Chapter 9: Watching Scores over Time - Customer LifeCycles Chapter 10: Customer Scoring Grids - Profiling on Steroids Chapter 11: Calculating and Using LifeTime Value in Promotions Chapter 12: Turning Profiles into Profits - the Staging Area Chapter 13: Turning Profiles into Profits - the Financial Model Chapter 14: Turning Profiles into Profits - Financial Tweaks Chapter 15: Measuring Success in Best Customer Promotions Chapter 16: Some Final Thoughts Seasonal Adjustments to Marketing Promotions Don't Fight Customer Behavior CRM Software and Customer Scoring Data-Driven Marketing Program Descriptions There's more! Automate the basic customer scoring process on large groups of customers. Use the software included free with this edition! Windows OS and MS Access and Excel required to run the software. |
| accounting for long term incentive plans: The Complete Guide to Executive Compensation 3/E Bruce R. Ellig, 2014-01-17 The definitive guide for anyone involved in designing and approving executive salaries—revised for new laws and attitudes about salaries and performance The Complete Guide to Executive Compensation, Third Edition, helps you evaluate your company’s culture, organization, and strategy to create the best compensation package for the organization’s interest. It contains new strategies based on recent changes regarding venture capitalism, boards of director’s core responsibilities, changes in director’s pay, shifts in stakeholder power, and laws like the Dodd-Frank Wall Street Reform and Consumer Protection Act and healthcare reform. Bruce R. Ellig served at Pfizer Inc. for over 35 years, and spent his last 25 years as secretary of the Board of Directors' Executive Compensation Committee. He has received the Lifetime Achievement Awards from the Society of Human Resource Management and WorldatWork. Ellig was elected to the National Academy of Human Resources in 1993 and served as a fellow of the Employee Benefit Research Institute and the Wharton Aresty Institute. |
| accounting for long term incentive plans: Responsible Executive Compensation for a New Era of Accountability Peter T. Chingos, 2004-04-12 A definitive road map to help companies assess and refine their executive reward strategies. Responsible pay has become inextricably linked with corporate governance and long-term shareholder value creation. Responsible Executive Compensation for a New Era of Accountability shows you how to revamp your executive compensation programs to drive shareholder value creation while adhering to the high standards of the new corporate governance environment. Packed with case studies, diagnostics, and contributions from world-renowned experts in executive compensation, this vital resource offers a comprehensive overview of the critical issues affecting executive compensation practice and theory during this new era. Order your copy today! |
| accounting for long term incentive plans: How to Use Finance and Accounting in HR (Collection) Bashker D. Biswas, Steven Director, 2013-08-08 In Compensation and Benefit Design , Bashker D. Biswas shows exactly how to bring financial rigor to the crucial people decisions associated with compensation and benefit program development. This comprehensive book begins by introducing a valuable Human Resource Life Cycle Model for considering compensation and benefit programs. Next, Biswas thoroughly addresses the acquisition component of compensation, as well as issues related to general compensation, equity compensation, and pension accounting. He assesses the full financial impact of executive compensation programs and employee benefit plans, and discusses the unique issues associated with international HR systems and programs. This book contains a full chapter on HR key indicator reporting, and concludes with detailed coverage of trends in human resource accounting, and the deepening linkages between financial and HR planning. Replete with both full and mini case examples throughout, the book also contains chapter-ending exercises and problems for use by students in HR and finance programs. ¿ HR managers are under intense pressure to become strategic business partners. Many, unfortunately, lack the technical skills in financial analysis to succeed in this role. Now, respected HR management educator Dr. Steven Director addresses this skill gap head-on. Writing from HR's viewpoint, Director covers everything mid-level and senior-level HR professionals need to know to formulate, model, and evaluate their HR initiatives from a financial and business perspective. Drawing on his unsurpassed expertise working with HR executives, he walks through each crucial financial issue associated with strategic talent management, including the quantifiable links between workforces and business value, the cost-benefit analysis of HR and strategic financial initiatives, and specific issues related to total rewards programs. Unlike finance books for non-financial managers, Financial Analysis for HR Managers focuses entirely on core HR issues. |
| accounting for long term incentive plans: The Complete Guide to Executive Compensation, Fourth Edition Bruce R. Ellig, 2021-12-28 The definitive guide to executive compensation—fully updated and revised to reflect today’s business environment Executive pay is one of the most fluid, flexible, and important aspects of today’s corporate landscape, and an integral part of every company’s strategic business plan. The Complete Guide to Executive Compensation has long been considered the go-to guide to executive pay. Written by renowned compensation expert Bruce Ellig, the book is filled with winning strategies and techniques for structuring appropriate executive pay plans. This updated fourth edition addresses important changes that have occurred from 2013 to 2019 in designing and administering compensation packages. In detail, Ellig discusses executive pay elements, including salary, employee benefits, executive benefits, and long- and short term incentives. He also examines the role of the board of directors and its compensation committee, along with the influence of the major stakeholders (most notably the shareholder). The Complete Guide to Executive Compensation, Fourth Edition covers: New rulings and laws, such as the 2018 Tax Act and recent changes in proxy statements required by the SEC Changes in healthcare and pension requirements Executive pay elements and contributing factors The difference between current and deferred compensation, including statutory requirements Various performance measurements of the income statement, the balance sheet, and the cash flow statement that are used in incentive plan payouts The book also includes appendices of selected laws, Internal Revenue Code sections, IRS revenue rulings, SEC actions, accounting interpretations, U.S. Supreme Court decisions, selected books, history of CPI, DJIA, NASDAQ, S&P 500 Averages, and Social Security taxes, as well as a glossary with more than 2,000 definitions.The Complete Guide to Executive Compensation addresses a wide range of needs and readers. Consultants and in-house pay designers will find detailed examples (supplemented with over 400 charts and tables) to trigger their own creativity.Boards of directors and compensation committees will benefit from the definitions and descriptions of various pay plans and the conditions under which they would be appropriate. Executives will find valuable tools here to help them understand their own pay plans. This is an essential resource for consultants, legislators, in-house designers, approvers, shareholders, executives, and educators.Whether you’re an executive or a designer, approver, or administrator of executive pay plans, this welcome fourth edition of the classic guide thoroughly reframes the picture of executive compensation for the modern age. |
| accounting for long term incentive plans: Handbook on the Economics and Theory of the Firm Michael Dietrich, Jackie Krafft, 2012-01-01 This unique Handbook explores both the economics of the firm and the theory of the firm, two areas which are traditionally treated separately in the literature. On the one hand, the former refers to the structure, organization and boundaries of the firm, while the latter is devoted to the analysis of behaviours and strategies in particular market contexts. the novel concept underpinning this authoritative volume is that these two areas closely interact, and that a framework must be articulated in order to illustrate how linkages can be created. This interpretative framework is comprehensively developed in the editors' introduction, and the expert contributors – more than fifty academics of renowned authority – further elaborate on the linkages in the seven comprehensive sections that follow, encompassing: background; equilibrium and new institutional theories; the multinational firm; dynamic approaches to the firm; modern issues; firms' strategies; and economic policy and the firm. Bridging economics and theory of the firm, and providing both technical and institutional perspectives on real corporations, this path-breaking Handbook will prove an invaluable resource for academics, researchers and students in the fields of economics, heterodox economics, business and management, and industrial organization. |
| accounting for long term incentive plans: The New Standards Richard N Ericson, 2010-05-20 Make the most of the new standards Every 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. Packed with examples, The New Standards insightfully discusses: How to link pay with business results that create long-term value Why incentive structures can discourage management from reasonable risk-taking, in some cases, and can enocourage imprudent risks in others The full range of inputs that should guide proper incentive policy Why performance measures must reflect both the quality and quantity of earnings Risk, executive behavior, and the cost of capital How to use valuation criteria when choosing metrics The pros and cons of common approaches to stock-based incentive pay Written by noted compensation expert Richard Ericson, this innovative book is a must-read for directors and management concerned with executive compensation design or financial performance measurement and forecasting. Get the guidance and concrete solutions you need to thoroughly reexamine your executive compensation policies and practices with the principles and financial maxims found in The New Standards. |
| accounting for long term incentive plans: The Director's Handbook Institute of Directors, 2007 The Director's Handbook, first published in 2005, filled a gap in the market by providing a practical guide to key issues facing board directors and senior business decision-makers. Now, with far-reaching changes in directors' duties and other principles of company law, this new edition updates and explains the laws which affect the way every director does their job.It deals with all aspects of a company director's role, duties, responsibilities and liabilities within the context of the current law and good practice. Written by leading experts and fully supported by research findings, it also contains case studies (named or unnamed) from companies of varying size and sector.The Director's Handbook is the essential reference and source of advice for all new and existing directors, as well as those who aspire to this position. |
| accounting for long term incentive plans: Accounting Principles Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, 1998-08-27 This edition has tips and strategies written by accounting students to annotate the student version of this edition. They tell the best ways to use the book and navigate through the course. Real-world e×amples have been incorporated to show students the relevance of the accounting principles. |
| accounting for long term incentive plans: Value Based Management with Corporate Social Responsibility John D. Martin, J. William Petty, James S. Wallace, 2009-08-19 As the first decade of the 21st century winds down we have seen a sea change in society's attitudes toward finance. The 1990s can best be described as the decade of shareholder supremacy, with each firm trying to outdo the other in their allegiance to shareholder value creation, or as it came to be known, Value-Based Management (VBM). No one seemed to question this culture as the rising firm valuations translated into vast wealth creation for so many. Three significant economic events have reshaped how the public feels about an unbridled devotion to VBM and have defined the last decade: the dot.com bubble in 2000, the infamous accounting scandals of 2001, and the collapse of the credit markets in 2007-2008. In all three of these events the CEOs were portrayed as reckless and greedy and Wall Street went from an object of admiration to an object of scorn. The first edition of this book, Value Based Management: The Corporate Response to the Shareholder Revolution was written to help explain the underpinnings of Value-Based Management. At the time of its publication, few questioned whether the concept was the proper thing to do. Instead, the debate was focused on how to implement a VBM program. With this new second edition, the authors look at VBM after having seen it through good times and bad. It is not their intent to play the blame game or point fingers. Nor is it their intent to provide an impassioned defense of VBM. Instead they provide an academic appraisal of VBM, where is has been, where it is now, and where they see it going. |
| accounting for long term incentive plans: Account-Based Growth Bev Burgess, Tim Shercliff, 2022-11-03 Develop long-term relationships, deliver market-beating growth, and create sustainable value with this pragmatic guide to aligning marketing, sales, customer success and your executives around your most important customers. Many B2B companies make half their profitable revenue from just three percent of their customers, yet don't recognize the significance of these accounts, nor invest appropriately in them. Account-Based Growth introduces a comprehensive framework for improving internal alignment and external engagement with these vital few. It contains bullet-pointed takeaways at the end of each chapter plus a comprehensive checklist to help you improve your own company's approach to its most important customers. Each element of the framework is brought to life through viewpoints from industry experts and case studies from leading organizations including Accenture, Fujitsu, Infosys, SAP, Salesforce, ServiceNow and Telstra. |
| accounting for long term incentive plans: Accounting and Business Valuation Methods Malcolm Howard, 2007-11-14 This book is intended to appeal to junior accountants and entrepreneurs who need guidance and practical analytical tools to enable them to develop business plans, raise capital and assess risk. Readers can initiate their own business plans by copying over 200 lines of formulae that create a 5 year plan that includes an earnings statement (or profit and loss account), balance sheet and cash flow statement. It will also appeal to students taking accounting and finance modules that cover basic accounting techniques, ratio analysis, investment appraisal, as well as company valuation and share valuation. The book demonstrates with four case studies where practice often differs with theory.Chapter 1 covers basic book-keeping, showing how accounts are reconciled and controlled covering topics such as the working capital cycle and negotiating techniques. Chapter 2 deals with basic business planning and how to use ratio analysis (performance, asset management, structure, and investment ratios) to assess company performance. Chapter 3 explains that published accounts are based on a series of judgements and the effect the relatively new international financial reporting standards and legislation such as the Sarbanes-Oxley Act is having on corporate governance. Chapter 4 covers risk assessment and valuing companies. Four case studies bring everything together; how investment trusts are valued, the effect of restructuring on share prices, the difference between serious profit warnings and mere compliance with regulation and hostile takeovers. Via a thorough analysis of published accounts this book will show readers how to: distinguish between mandatory and optional reports; assess the strength of a company's balance sheet; assess the risk factors associated with investment; assess whether or not the market value of a particular company is justified.* examines the difference between mandatory and optional reports* explains how to assess the strength of a companys balance sheet* looks at how to assess whether or not the market value of a particular company is justified |
| accounting for long term incentive plans: Key Account Management and Planning Noel Capon, 2001-09-04 The current explosion in mergers and acquisitions has prompted a rapid change in the nature of sales straegies and ideologies. So say goodbye to traditional, tired and true systems, and say hello to customer consolidation, account partnerships and above all, increased sales pressure. It's a bold new business world, in which a firm's 'key' accounts are by far its most crucial assets. Recognising the central importance of managing key accounts, Noel Capon has written a timely and truly indispensable guide for the entire sales force, from the sales director to the key-account manager. He presents a powerful, step-by-step framework for developing domestic and global strategies, organising the process, managing the sales force, and effectively analyzing key accounts. |
| accounting for long term incentive plans: Risk Management and Corporate Governance Abol Jalilvand, Tassos Malliaris, 2013-05-13 The asymmetry of responsibilities between management and corporate governance both for day-to-day operations and the board’s monthly or quarterly review and evaluation remains an unresolved challenge. Expertise in the area of risk management is a fundamental requirement for effective corporate governance, if not by all, certainly by some board members. This means that along with board committees such as compensation, audit, strategy and several others, risk management committees must be established to monitor the likelihood of certain events that may cause the collapse of the firm. Risk Management and Corporate Governance allows academics and practitioners to assess the state of international research in risk management and corporate governance. The chapters overlay the areas of risk management and corporate governance on both financial and operating decisions of a firm while treating legal and political environments as externalities to decisions undertaken. |
| accounting for long term incentive plans: Compensation and Reward Management (Second edition) , |
| accounting for long term incentive plans: Advances in Quantitative Analysis of Finance and Accounting (New Series，2012) Vol．10 Cheng F. Lee, Alice C. Lee, 2012-12-01 Advances in Quantitative Analysis of Finance and Accounting (New Series) is an annual publication designed to disseminate developments in the quantitative analysis of finance and accounting. The publication is a forum for statistical and quantitative analyses of issues in finance and accounting as well as applications of quantitative methods to problems in financial management, financial accounting, and business management. The objective is to promote interaction between academic research in finance and accounting and applied research in the financial community and the accounting profession. |
| accounting for long term incentive plans: The WG & L Handbook of Financial Strategy & Policy Dennis E. Logue, 1995 |
| accounting for long term incentive plans: Federal Register , 1999-01-26 |
| accounting for long term incentive plans: Department for International Development annual report & resource accounts 2009 - 10 Great Britain: Parliament: House of Commons: International Development Committee, 2011-02-03 In the 2010 Comprehensive Spending Review the Coalition Government announced its decision to achieve the internationally agreed target of providing 0.7 percent of Gross National Income as ODA from 2013. This will involve spending an additional 2.5 billion pounds in 2013-14 to make the total DFID budget 11.3 billion pounds in that year. There will be a large increase in spending on fragile and conflict affected states and it will be difficult to ensure that every pound is well spent in such war-torn environments. When scrutinising DFID's accounts the MPs were also surprised to discover that the Pope's visit was paid for in part by money supposed to be for overseas development aid (ODA). The Committee expects a response from the Government as to what the £1.85 million, transferred to the Foreign Office for the papal visit, was spent on and an explanation as to how this was ODA compliant. The Comprehensive Spending Review (CSR) announced reductions in DFID's running costs to 2% of the total budget. If achieved, this would make DFID the most cost-efficient development organisation in the world.This is to be achieved by a large reduction in back office administration costs (which excludes front-line staff) of £34 million over the CSR period. The International Development Committee supports the proposals to make savings in back office staff, but the MPs are warning that Ministers must ensure that reduced administration budgets do not affect the ability to deliver aid programmes on the ground. While declining as a share of total costs, running costs will increase in real terms over the next four years because the total budget will rise so much. |
| accounting for long term incentive plans: The Handbook of the Economics of Corporate Governance Benjamin Hermalin, Michael Weisbach, 2017-09-18 The Handbook of the Economics of Corporate Governance, Volume One, covers all issues important to economists. It is organized around fundamental principles, whereas multidisciplinary books on corporate governance often concentrate on specific topics. Specific topics include Relevant Theory and Methods, Organizational Economic Models as They Pertain to Governance, Managerial Career Concerns, Assessment & Monitoring, and Signal Jamming, The Institutions and Practice of Governance, The Law and Economics of Governance, Takeovers, Buyouts, and the Market for Control, Executive Compensation, Dominant Shareholders, and more. Providing excellent overviews and summaries of extant research, this book presents advanced students in graduate programs with details and perspectives that other books overlook. - Concentrates on underlying principles that change little, even as the empirical literature moves on - Helps readers see corporate governance systems as interrelated or even intertwined external (country-level) and internal (firm-level) forces - Reviews the methodological tools of the field (theory and empirical), the most relevant models, and the field's substantive findings, all of which help point the way forward |
| accounting for long term incentive plans: Creating Value Through Corporate Restructuring Stuart C. Gilson, 2001-08-07 This work is a collection of case studies illustrating real-world techniques, implementation, and strategies on corporate restructuring. They examine the numerous companies and trillions of dollars involved in corporate restructuring since the 1980s. |
| accounting for long term incentive plans: The Definitive Guide to HR Management Tools (Collection) Alison Davis, Jane Shannon, Wayne Cascio, John Boudreau, James C. Sesil, Ben Waber, Bashker D. Biswas, Steven Director, 2013-11-07 A brand new collection of high-value HR techniques, skills, strategies, and metrics… now in a convenient e-format, at a great price! HR management for a new generation: 6 breakthrough eBooks help you help your people deliver more value on every metric that matters This unique 6 eBook package presents all the tools you need to tightly link HR strategy with business goals, systematically optimize the value of all your HR investments, and take your seat at the table where enterprise decisions are made. In The Definitive Guide to HR Communication: Engaging Employees in Benefits, Pay, and Performance, Alison Davis and Jane Shannon help you improve the effectiveness of every HR message you deliver. Learn how to treat employees as customers… clarify their needs and motivations … leverage the same strategies and tools your company uses to sell products and services… package information for faster, better decision-making… clearly explain benefits, pay, and policies… improve recruiting, orientation, outplacement, and much more. In Investing in People, Second Edition, Wayne Cascio and John W. Boudreau help you use metrics to improve HR decision-making, optimize organizational effectiveness, and increase the value of strategic investments. You'll master powerful solutions for integrating HR with enterprise strategy and budgeting -- and for gaining commitment from business leaders outside HR. In Financial Analysis for HR Managers, Dr. Steven Director teaches the financial analysis skills you need to become a true strategic business partner, and get boardroom and CFO buy-in for your high-priority initiatives. Director covers everything HR pros need to formulate, model, and evaluate HR initiatives from a financial perspective. He walks through crucial financial issues associated with strategic talent management, offering cost-benefit analyses of HR and strategic financial initiatives, and even addressing issues related to total rewards programs. In Applying Advanced Analytics to HR Management Decisions , pioneering HR technology expert James C. Sesil shows how to use advanced analytics and Big Data to optimize decisions about performance management, strategy alignment, collaboration, workforce/succession planning, talent acquisition, career development, corporate learning, and more. You'll learn how to integrate business intelligence, ERP, Strategy Maps, Talent Management Suites, and advanced analytics -- and use them together to make far more robust choices. In Compensation and Benefit Design , world-renowned compensation expert Bashker D. Biswas helps you bring financial rigor to compensation and benefit program development. He introduces a powerful Human Resource Life Cycle Model for considering compensation and benefit programs… fully addresses issues related to acquisition, general compensation, equity compensation, and pension accounting… assesses the full financial impact of executive compensation and employee benefit programs… and discusses the unique issues associated with international HR programs. Finally, in People Analytics, Ben Waber helps you discover powerful hidden social levers and networks within your company, and tweak them to dramatically improve business performance and employee fulfillment. Drawing on his cutting-edge work at MIT and Harvard, Waber shows how sensors and analytics can give you an unprecedented understanding of how your people work and collaborate, and actionable insights for building a more effective, productive, and positive organization. Whatever your HR role, these 6 eBooks will help you apply today's most advanced innovations and best practices to optimize workplace performance -- and drive unprecedented business value. From world-renowned human resources experts Alison Davis, Jane Shannon, Wayne Cascio, John W. Boudreau, Steven Director, James C. Sesil, Bashker D. Biswas, and Ben Waber . |
| accounting for long term incentive plans: The Greenhouse Gas Protocol , 2004 The GHG Protocol Corporate Accounting and Reporting Standard helps companies and other organizations to identify, calculate, and report GHG emissions. It is designed to set the standard for accurate, complete, consistent, relevant and transparent accounting and reporting of GHG emissions. |
| accounting for long term incentive plans: Accounting Trends and Techniques in Published Corporate Annual Reports , 2007 |
| accounting for long term incentive plans: Managerial Accounting and Control Richard H. Mimick, Jeffrey Kantor, 1985 |
| accounting for long term incentive plans: The Compensation Handbook Lance A. Berger, Dorothy R. Berger, 2000-01-19 Straight answers to your compensation questions An A-to-Z guide to compensation strategy and design, Compensation Handbook, Fourth Edition, has been completely revised and updated to keep you on top of the important changes that have taken place in this area. Editors Lance A. Berger and Dorothy R. Berger have assembled articles by leading compensation practitioners to give you authoritative solutions to a wide range of specific compensation problems. This important new edition shares with you the best thinking on attracting and retaining outstanding employees in a tight market...executive compensation...computers and compensation...how to use a mix of compensation devices...and much, much more. |
The Best 10 Accountants near Ashburn, VA 20147 - Yelp
What are the best accountants who offer individual tax return preparation?
Home - Nova Tax & Accounting Services | Ashburn, VA
We are a leading Certified Public Accounting (CPA) firm dedicated to delivering a comprehensive range of professional services to meet all your financial needs.
Ashburn, VA Accounting Firm, Donovan Tax & Accounting, LLC
Donovan Tax & Accounting, LLC is a full service tax, accounting and business consulting firm located in Ashburn, VA.
Virginia CPA Firm | Home Page | RAVIBCPA & COMPANY, LLC.
We offer a broad range of services to help our clients. Count on us to take the worry out of your small business accounting. We help you take charge of your finances to ensure a secure …
What Is Accounting? The Basics Of Accounting – Forbes Advisor
Jun 12, 2024 · Accounting is the process of recording, classifying and summarizing financial transactions. It provides a clear picture of the financial health of your organization and its...
Ashburn, VA Accounting Firm | Home Page | NOVA Tax Group
NOVA Tax Group is a tax & accounting firm comprised of small group of experienced professionals including CPAs and attorneys. We offer a broad range of services for individuals, …
9 Best Ashburn, VA Accountants | Expertise.com
4 days ago · We scored Ashburn accountants on more than 25 variables across five categories, and analyzed the results to give you a hand-picked list of the best. Learn about our selection …
Ashburn, VA Accounting Firm | Home Page | Kheire & Associates, …
Find comfort in knowing an expert in accounting is only an email or phone-call away. (703)724-9406. We will happily offer you a free consultation to determine how we can best serve you. …
Ashburn, VA Accounting & Bookkeeping Services | 1 …
Bookkeeping: Build a strong financial foundation for your Ashburn enterprise with precise, reliable bookkeeping. Our service saves you time and provides clear insights to guide your business …
Ashburn Accounting
Ashburn Accounting provides full charge bookkeeping services.
The Best 10 Accountants near Ashburn, VA 20147 - Yelp
What are the best accountants who offer individual tax return preparation?
Home - Nova Tax & Accounting Services | Ashburn, VA
We are a leading Certified Public Accounting (CPA) firm dedicated to delivering a comprehensive range of professional services to meet all your financial needs.
Ashburn, VA Accounting Firm, Donovan Tax & Accounting, LLC
Donovan Tax & Accounting, LLC is a full service tax, accounting and business consulting firm located in Ashburn, VA.
Virginia CPA Firm | Home Page | RAVIBCPA & COMPANY, LLC.
We offer a broad range of services to help our clients. Count on us to take the worry out of your small business accounting. We help you take charge of your finances to ensure a secure future. …
What Is Accounting? The Basics Of Accounting – Forbes Advisor
Jun 12, 2024 · Accounting is the process of recording, classifying and summarizing financial transactions. It provides a clear picture of the financial health of your organization and its...
Ashburn, VA Accounting Firm | Home Page | NOVA Tax Group
NOVA Tax Group is a tax & accounting firm comprised of small group of experienced professionals including CPAs and attorneys. We offer a broad range of services for individuals, self-employed …
9 Best Ashburn, VA Accountants | Expertise.com
4 days ago · We scored Ashburn accountants on more than 25 variables across five categories, and analyzed the results to give you a hand-picked list of the best. Learn about our selection …
Ashburn, VA Accounting Firm | Home Page | Kheire & Associates, …
Find comfort in knowing an expert in accounting is only an email or phone-call away. (703)724-9406. We will happily offer you a free consultation to determine how we can best serve you. …
Ashburn, VA Accounting & Bookkeeping Services | 1 …
Bookkeeping: Build a strong financial foundation for your Ashburn enterprise with precise, reliable bookkeeping. Our service saves you time and provides clear insights to guide your business …
Ashburn Accounting
Ashburn Accounting provides full charge bookkeeping services.
