New CEO hired to manage the turnover of family newspaper publisher. Unlike the previous administration, it implements the new compensation scheme, which is clearly linked executive pay to the market value on the basis of firm performance measures. Because companies are not publicly traded, the payments under the executive compensation plan is based on the appraised value of the firm. Determination of value for the company (including the value created by the rotation manager) is a complex exercise. Additional complications arise because the value of the firm also determines the potential distribution of funds family members who wish to sell their shares back to the company. Some goals of the family may not be compatible with the objective of maximizing the current CEO of the company assets. "Hide
by Stuart C. Gilson, Jeremy Cott Source: Harvard Business School 19 pages. Publication Date: March 14, 1995. Prod. #: 295114-PDF-ENG
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