In today’s briefing:
- Adopting ROIC as a KPI Is Positive, but the Issue of Executive Compensation Remains Unresolved
Adopting ROIC as a KPI Is Positive, but the Issue of Executive Compensation Remains Unresolved
- More large companies adopting ROIC as a KPI for executive compensation can be viewed as a positive change, indicating a growing awareness of capital costs and capital profitability among companies.
- Shifting the growth strategy from sales and profits to capital profitability, and aligning the KPIs for that growth strategy with executive compensation KPIs, is also consistent with the investor perspective.
- However, adopting ROIC as a KPI for growth strategies and its integration into management practices has only just begun at large companies, and issues surrounding executive compensation remain unresolved.
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