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Upon this analysis we will conclude whether it is a good idea to implement it and state our suggestions for a modification of the plan.
Valuation of the proposed bonus plan
Included in the new bonus plan are the store managers (SM), the regional managers (RM), and the corporate staff managers (CM). Not included are the CEO (Mr. Gonzalez) and the COO; their bonuses would be decided by the compensation committee of the board of directors. Furthermore all other employees not included in the plan would continue as before with a bonus in the range of 2%-5% of base salary.
Each of the company’s 82 stores is operated by a SM, who has a lot of autonomy...
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