How do you value earnings reductions due to incentive compensation?

[bz1516]

Let's say eps increases 20% before stock based incentive compensation compensation, but after the incentive compensation costs are subtracted the eps increase is 10%.  This is a regular occurrence.

 

Do you just count it as 10% or do you think of it as 20% or some amount in between.  I'm curious to know what people here think?

[peter1234]

If fully diluted EPS increases 10% then that is what I would use.

 

In the (unlikely) event that you think there is a good chance of reducing/eliminating incentive comp and still getting 20%, then I would think some more.

 

;)