Xcel, Inc. is a profitable company. In 2019, Xcel had no debt. In 2020, the chief executive officer (CEO) instructed the company to borrow $100 million in order to increase earnings per share, from $1.30 to $1.40. The chart below shows the outcome from the extra debt.

In January 2021, the CEO asks for a $2 million bonus, as a reward for increasing EPS.

In your opinion, does the CEO deserve a bonus? Short answer. You do not need to perform calculations.

In millions $, except EPS	2019 no debt	2020 no debt estimate	adjustments	2020 actual results with debt
Sales-Xcel	650	650	--	650
Net Income	26	26	-3.6	22.4
EPS	1.30	1.30	+0.10	1.40
Shares Outstanding	20	20	-4	16