The Lemon Fool

Anyone who believes executive compensation schemes are not biased in favour of the executives and against shareholders only needs to read this from the ABF annual report.

This year we have recognised an
impairment charge of £65m in respect
of our UK bakeries following the loss
of a key contract. This has been
charged ‘below the line’ of adjusted
operating profit and does not impact
incentive outcomes.

Let them eat cake, our bonus is in the bag !

OhNoNotimAgain wrote:Anyone who believes executive compensation schemes are not biased in favour of the executives and against shareholders only needs to read this from the ABF annual report.

This year we have recognised an
impairment charge of £65m in respect
of our UK bakeries following the loss
of a key contract. This has been
charged ‘below the line’ of adjusted
operating profit and does not impact
incentive outcomes.

Weird mind you, since wherever their accountant places this charge, surely it would in itself reduce EPS which is the famous incentive metric.

However (must fess up that I've not read the referred above AR!), now I read more of your italicised I'm given to understand, that if they incentivise based on (their interpretation of) ROCE and they get the numberator (operating profit) from "above the line" mentioned in the excerpt, then this indeed is a tad underhand.

Matt