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The owner of a rm is looking for a manager and drawing up terms of remuneration. He was not satised with the previous manager's perfor

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The owner of a rm is looking for a manager and drawing up terms of remuneration. He was not satised with the previous manager's perfor mance. The owner is used to giving xed salaries, but would like to follow some of his competitors and introduce performancerelated pay. He thinks that the rm's prots should be a good measure of the manager's perfor mance' but is not sure how much of the pa),r should he performancerelated; Give the owner some advice

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