BY JAMES COLLINS
Are you a board member (or a bored member) frustrated as you try to find some rational for determining your CEO’s compensation? While long, complex calculations may be the norm, it might be helpful to see how the banks do it—in just 10 easy steps:
Step 1—Write down a REALLY large number. Go ahead: $ ____________________
Step 2—You call that big? That’s like the budget to produce that horrid Titanic movie. Think BIG, like, “How much did we make on fixing rates on foreign currencies last month?”
Step 3—Okay, if your institution made money in the past 12 months double it. If your institution lost money in the past twelve months, multiply by 200 percent instead.
