CEO Compensation Design Project: Selecting Performance Goals & Implementing Corporate Social Responsibility

• In Event: Reception with Effective Learning Strategies Displays

Abstract

As part of a corporate income tax course, The CEO Compensation Design Project gives students the power to set annual bonus performance goals to both increase learning and incorporate an ethical framework in business practices. I.R.C. Section 162(m) provides that public firm CEO compensation in excess of $1 million is tax deductible only if linked to quantifiable performance goals. By requiring that students establish these goals and identify a strength and weakness of each, this project helps to increase student retention and understanding by incorporating active, decision-based learning, and by illustrating to students the importance of accounting in a real-world setting. This project also provides the opportunity to discuss the importance and limitations of business ethics because the students may include Corporate Social Responsibility goals, but must still quantify the measures.

Author

• Amy J. N. Yurko, Duquesne University