An early candidate.
An early candidate has emerged for the 2010 Business & Finance Awards (see main website for 2009 top ten.) A new category may be added “Most cryptic twister.”
Sir Win Bischoff chairman of Lloyds Banking Group has explained that “You set performance criteria in light of what it will be. The “X” may be a minus. You are grading people not by absolute numbers but on a relative basis.”
The state-backed bank made £6.3bn “minus” profit in the year to end December 09 and if he had not foregone it, the chief executive’s bonus would have been £2.25m.
The remuneration rules for Lloyds Bank are worth a second look. “Half the incentive is based on the stretching budget relating to profit before tax and economic profit.” So, one assumes that the definition of profit (and in complete defiance of all the technical tutorials on my website) can include “negative” profit and we are left whimsically guessing at what the other half of the incentive package is based on.
Who remembers Watergate, the explanations of Bill Clinton and the “unknown unknowns” of Donald Runsfeld?
More at www.jgwalkersmith.co.uk
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