Simon – Pot 1

• He earns €40,000 per year

• His at target bonus is 20%
In Year 1 Simon over-achieves his targets and earns a bonus of 25% which is paid in the following March

Extra 50% paid to LTIP Pot 1

€10,000 bonus
paid to Simon
€10k

Pot 1
€5k
In October, Simon receives a 10% payment from his Pot 1

10% of Pot 1

€500 LTIP bonus

paid to Simon €500
Pot 1
2015 €5k
€5k
€4.5k
Year 2 Simon’s salary has increased to €42k. He hits his targets and earns a bonus of 20%.

Extra 50% paid to LTIP Pot 2

Pot 2
€4.2k
€8,400 bonus
€8.4k
paid to Simon
Pot 1
€4.5k
In October Simon receives 2 payments from his pots

20% of Pot 1+ 10% of Pot 2

Pot 2
€3.78K
€4.2k
€1k Pot 1
€420 Pot 2 €1.42k
paid to Simon
Pot 1
€4.5k
€3.5k
Year 3 Simon earns a bonus of 22% and his salary has increased to €43k

Extra 50% paid to new Pot

Pot 2
€3.78k
€9.46k bonus €9.46k
paid to Simon
Pot 1 Pot 3
€3.5k €4.73k
October Simon receives 3 payments from his LTIP Pots

30% of Pot 1 + 20% of Pot 2 + 10% of Pot 3

Pot 2
€2.94k
€3.78k
€1.5k Pot 1
€840 Pot 2 €2.81k
€473 Pot 3
paid to Simon Pot 1 Pot 3
€3.5k
€2k €4.73k
€4.26k
During Year 4 Simon has a good year and earns his full bonus of 20%. His current salary is
€45k.

Extra 50% paid to Pot 4

Pot 2
€2.94k Pot 4
€4.5k
€9k bonus
paid to Simon in
€9k
March
Pot 1 Pot 3
€2k 4.26k
October Simon receives payments from his pots

40% of Pot 1 + 30% of Pot 2 + 20% of Pot 3 + 10% of Pot 4

Pot 4
€4.5k
€4k
Pot 2
€2k Pot 1 €1.68k
€2.94k
€1.26k Pot 2
€946 Pot 3 €4.66k
€450 Pot 4
Pot 3
paid to Simon Pot 1
€3.31k
€4.26k
€2k
€0
Year 5 Simon’s bonus is 25% and his current salary is €47k.

Extra 50% paid to Pot 5

Pot 2
€1.68k Pot 4
€4k
€11.75k bonus
paid to Simon in €11.75k
March
Pot 5 Pot 3
€5.88k 3.31k
Question1 How much bonus will he get in
October of 5th year

Question 2: Assuming, Salary is increased to

60K in 6th year, and bonus is 30%, what will be
bonus pot payouts in 6th year

Question 3:
Design a generic formula in excel for 6th year
bonus
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1 How much will be the LTIP on year 6, if the bonus on year 6 is 9000.
Present your analysis in excel

2 How much will be the LTIP on year 7 if bonus is 8000,

Present your analysis in excel

3 How much will be the LTIP on year on year 8 when bonus is 6000

Present your analysis in excel

4 On year 3 if the bonus is changed to 6500 instead of 9460,then how much will be LTIP on year 3, 4, 5.

Present your analysis in excel

5 Derive a Generalized formula,  in excel

Present your analysis in excel

6. design the product for this system assuming this is to be done for 1000 employees: Note that things factors will be different
between 1000 employees

Present all analysis design in excel

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