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Non-Tech : Cendant Corporation (NYSE:CD) -- Ignore unavailable to you. Want to Upgrade?

To: Jeff Lins who wrote (2614)	11/26/1998 5:14:00 PM
From: Benkea	Read Replies (1) \| Respond to of 3627

"Yup...It is really hard to motivate people financially (as silly as that sounds- it is true)...Bonus based on Net Income is really tricky.. sounds great on paper, but like you said it can really backfire. One of my favorites is the old "writeoff from hell" commonly referred to as the "Big Bath"." Naturally Henry has found a way around this. His bonus is based on "EBITDA" (Earnings before just about everything). Thus, he has just been on a tear to buy as much crap as he can get his hands on to add to EBITDA. The best companies for Henry are those which are highly leveraged as the interest they pay don't infringe upon his bonus calc.