ORGANIZATIONWIDE INCENTIVES PLANS AND INCENTIVES FOR MANAGERS AND EXECUTIVES

ORGANIZATIONWIDE INCENTIVE PLANS

Profit-sharing plans. Employee stock ownership plan(ESOP). Gain sharing plans. At risk variable pay plans.

PROFIT SHARING PLANS

A plan that gives employees a share in the profits of the company. Each employee receives a percentage of those profits based on the companys earnings.

Cash plans.

Lincoln incentive plans.

Deferred profit-sharing plans.

EMPLOYEE STOCK OWNERSHIP PLAN(ESOP)

A qualified, defined contribution, employee benefit plan designed to invest primarily in the stock of the sponsoring employer. ESOPs are "qualified" in the sense that the ESOP's sponsoring company, the selling shareholder and participants receive various tax benefits. ESOPs are often used as a corporate finance strategy and are also used to align the interests of a company's employees with those of the company's shareholders.

GAIN SHARING PLAN

Establish general plan objectives. Choose specific performance measures Decide on a funding formula. Choose the form of payment. Decide how often to pay bonuses. Develop the involvement system.

Implement the plan.

AT-RISK VARIABLE PAY PLAN

Variable pay is used to recognize and reward employee contributions to the company's success. Examples include: profit sharing, bonuses and other benefits.

INCENTIVES FOR MANAGERS AND EXECUTIVES

1) SHORT TERM INCENTIVES: Annual bonus Eligibility Fund size 2) LONG TERM INCENTIVES Stock option Stock option problems Broad based stock options