2006: How would you design a compensation system for a cyclical business?
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AUDIENCE MEMBER: Good morning. My name is Phil Rafton (PH), shareholder from Orinda, California. My question for you: How would you design a compensation system in a very cyclical industry that can swing from boom to bust? You want to tie compensation to results in some way, but this can lead to huge swings in pay. And, for example, today in booming industries, like energy and mining, profits are large as a result of the boom in the industry and not necessarily the results of management skill.
2006: How would you design a compensation system for a cyclical business?
2006: How would you design a compensation…
2006: How would you design a compensation system for a cyclical business?
AUDIENCE MEMBER: Good morning. My name is Phil Rafton (PH), shareholder from Orinda, California. My question for you: How would you design a compensation system in a very cyclical industry that can swing from boom to bust? You want to tie compensation to results in some way, but this can lead to huge swings in pay. And, for example, today in booming industries, like energy and mining, profits are large as a result of the boom in the industry and not necessarily the results of management skill.