Cash Incentive Simulator

Objective:

• Provide a tool that allows to simulate and back-test different incentive compensation parameters for sales units of an Asset Management firm

Solution:

• Interactive tool reflecting different cash incentive compensation design alternatives, like, e.g.:
  
  • Designs based on value driver target levels  per individual/team, product category and market
  • Designs built upon Value Based Management principles
• Determines the corresponding funding levels for cash incentive compensation purposes
• Shows cascading of different profitability and profit contribution levels
• Defines “pay for performance” and “target bonus” metrics per sales unit and market
• Provides back-testing functionalities (“what-if-analysis”) by applying simulated value driver target levels to prior years’ performance and pay-out levels

Main value added of Cash Incentive Simulator:

• Used to determine new cash bonus mechanics for Sales teams of an Asset Management firm
• Used to determine absolute bonus levels in the year of development
• Alternative designs served to increase the awareness of conflicts of interests & to improve shareholder alignment