We introduced a special Strategic Alignment Award to be measured over the span of two years. The awards aligned directly with the transformation initiatives and complemented the relative metrics in its ongoing performance unit program.
The metrics focused on the specific sales channels that the client was hoping to improve, as well as EBIT growth to ensure that this was done profitably. A modifier was also introduced to incentivize the effective allocation of capital to drive this profit. As the first phase of broader transformation was to accelerate performance on the retail fundamentals, the metrics were effectively designed to support the CEO’s push.
The award values ranged from 0.5x to 1.25x of regular annual award values. This provided significant incentive to executives without overspending during a time in which the company did not have the ability to do so.