Mr. X, the chairman of the compensation committee of the board of directors of OA Corporation, is concerned about the incentives that exist in the current compensation system for management of the company. Currently, the compensation system provides for a base salary plus a bonus that may amount to as much as 100% of the executive's base salary. The bonus is based on accounting net income. Prepare a memorandum explaining the risks in the company's compensation system and describing one system that might be better.