Patent ID: 7065495
Filing Date: 2006-06-20
Classification: G06Q

Abstract:
1. A method of compensating a manager who exercises administrative control over operations of a privately owned primary firm for the purpose of reducing the degree to which prices exceed marginal costs in an industry, reducing incentives for industry collusion between the primary firm and a set of comparison firms in said industry, or reducing incentives for coordinated special interest industry lobbying, said set of comparison firms including at least one firm, said primary firm having the manager who exercises administrative control over said primary firm's operations during a sampling period, wherein privately owned means not wholly government owned, the method comprising the steps of: a) choosing an absolute performance standard from a set of absolute performance standards; b) measuring an absolute performance of said primary firm with respect to said chosen absolute performance standard for said sampling period; c) measuring an absolute performance of each firm of said set of comparison firms with respect to said chosen absolute performance standard for said sampling period, said measurement of performance for each firm of said set of comparison firms forming a set of comparison firm absolute performance measures; d) determining a performance comparison base based on said set of comparison firm absolute performance measures by calculating a weighted average of said set of comparison firm absolute performance measures; e) comparing said measurement of absolute performance of said primary firm with said performance comparison base; f) determining a relative performance measure for said primary firm based on said comparison of said primary firm measurement of absolute performance and said performance comparison base; g) determining the managerial compensation amount derived from said relative performance measure according to a monotonic managerial compensation amount transformation; and h) transferring compensation to said manager, said transferred compensation having a value related to said managerial compensation amount.