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Household Brands Incorporated (HBI) manufactures household goods in the United States. The company made two acquisitions in previous years to diversify their product lines. In
Household Brands Incorporated (HBI) manufactures household goods in the United States. The company made two acquisitions in previous years to diversify their product lines. In 2011, HBI acquired cosmetics and consumer electronics companies. HBI is now, in 2022, comprised of three divisions: cosmetics, household, and consumer electronics. The following information (in thousands of dollars) presents operating revenues, operating income, and invested assets of the company over the last three years: Operating Income Revenue Assets $ 22,600 24,900 20,900 $ 2,100 2,300 1,300 $ 10,600 10,500 9,200 Cosmetics 2020 2021 2022 Household 2020 2021 2022 Electronics 2020 2021 2022 Household Brands Total 2020 2021 2022 15,600 12,900 11,100 1,200 1,200 940 7,770 7,830 6,550 15,000 9,490 8,400 2,000 600 1,140 4,350 4,680 4,260 53,200 47,290 40,400 5,300 4,100 3,380 22,720 23,010 20,010 The current compensation package is an annual bonus award. The senior executives share in the bonus pool. The pool is calculated as 20% of the annual residual income of the company. The residual income is defined as operating income minus a cost of capital charge of 15% of invested assets. The total amount of the bonus pool for 2020 is
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