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Understanding Management Compensation

Actively Speaking Podcast

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Aligning Management Compensation with Shareholder Value

This chapter explores effective management compensation strategies by examining three exemplary companies: First Rand, Atlas Copco, and Constellation Software. It discusses the importance of aligning incentives with shareholder interests, focusing on return on invested capital (ROIC) while critiquing the limitations of return on equity (ROE) in evaluating management performance.

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