NightWatch Investors Question Executive Compensation If the price of stock in NightWatch Corporation has gone down, why does it look like the overall compensation of the company's executive team gone up this year? That was the most contentious question raised at NightWatch's annual shareholder meeting, held Friday morning at the King's Landing Convention Center. An investor who didn't identify himself asked politely why, when gross margins, operating margins, earnings per share, and market share had all declined during the year ended December 31, 2019, "Why are company executives receiving higher compensation than the previous year?" "Shareholders who held stock for 12 months lost half their money, the man said from the audience. "Stock was down 50 percent; thousands of employees were laid off. Yet I see in most cases, executive compensation is up from last year, in some cases significantly. I'm just trying to understand how something like that can be justified, given that shareholders and employees have lost so much." The director of NightWatch investor relations, Margery Tyrell, defended the company's performance and tried to put it in context, saying last year was a "shock to global economic markets, and every company in our industry is facing significant losses." Tyrell pointed out that no top executives, including Chairman and CEO Jon Snow, received salary increases: the increased compensation was in the form of performance bonuses. Other executives may have received bonuses "related to their hire" or received company shares as part of a previously arranged grant. (Heavily modified from an article by Erica Ogg, posted on CNET News, July 17, 2009.) REQUIRED: a) b) When a company is setting performance measurements for its management team, what two characteristics must be considered for each performance measurement? (5 Marks) Related to the article quoted above, evaluate NightWatch's executive compensation in the context of the two characteristics you identified in (a)