FESA CONSOL

FlexSystem

Issues for the Computation of Executive Compensation

Issues

Computation of executive compensation can be a tedious exercise as the basis of computation is associated with the financial performance of business operations responsible by an individual executive.

Unlike preparation of tax computations for each fiscal year, computation of executive compensation will involve more frequent changes of computational rules. In addition, the measurement is not limited to financial performance of their responsible business unit but is often broader in nature with both short and long term components. The measurement, recognition, disclosure and presentation for these management accounts can be fundamental different from financial accounts.

The workload for the preparation of the management accounts in this situation can be significant and costly when most of the transformation work is manipulated manually on a spreadsheet system. To integrate all relevant information into financial accounts is not practical as it may violate the measurement rules of accounting standards.

  

Expectations

The preparation of management accounts should be improved to support strategic human resource management and in addition, new systems should be able to support fast changing computational rules for performance management.

  

Solutions

FESA Professional Accounting is able to allow for the configuration of processing rules with different computational basis being applied to different effective dates. In addition, preparation of management accounts with multiple scenarios is also supported by the system.

  

Benefits

The system can motivate and support the management team within organizations to closely monitor business and financial performance for their responsible business units as the system can generate relevant financial information very quickly and reliably.