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There's research done on how cash bonuses work. Bonus plans have a significat impact on the executive's incentives to boost corporate performance.
The research found that bonus plans ultimately facilitates better cooperation across top management teams because it holds senior executives collectively responsible for key performance measures and promote "mutual monitoring" and other collaborative behavior among team members.
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Bonus plans are pretty ubiquitous and many executive bonus structures don't use a bottom-line net income to gauge performance but instead they use figures higher up on the income statement like EBITDA (earnings before interest, taxes, depreciation, and amorization).
Trying bonus-r...
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When it comes to executive compenation, including bonus plans, there is no one-size-fits-all solution.
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