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    LTIP Bonus and Yearly Bonus Calculation

    Uploaded by

    BOBBY SINHA
    The document outlines a system to calculate yearly bonuses and long-term incentive plan (LTIP) payouts for employees. It defines the variables and formulas needed to calculate an employee's target bonus for a given year based on their salary and target achievement from the previous year, as well as how much they contribute annually to their LTIP pot and how the LTIP payout is calculated based on contributions from the past 4 years. Sample data on employee and salary information is also provided to demonstrate how the calculations would work.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd

    LTIP Bonus and Yearly Bonus Calculation

    Uploaded by

    BOBBY SINHA
    199 views7 pages
    The document outlines a system to calculate yearly bonuses and long-term incentive plan (LTIP) payouts for employees. It defines the variables and formulas needed to calculate an employee's target bonus for a given year based on their salary and target achievement from the previous year, as well as how much they contribute annually to their LTIP pot and how the LTIP payout is calculated based on contributions from the past 4 years. Sample data on employee and salary information is also provided to demonstrate how the calculations would work.

    Original Title

    LTIP Solution

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    The document outlines a system to calculate yearly bonuses and long-term incentive plan (LTIP) payouts for employees. It defines the variables and formulas needed to calculate an employee's target bonus for a given year based on their salary and target achievement from the previous year, as well as how much they contribute annually to their LTIP pot and how the LTIP payout is calculated based on contributions from the past 4 years. Sample data on employee and salary information is also provided to demonstrate how the calculations would work.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    199 views7 pages

    LTIP Bonus and Yearly Bonus Calculation

    Uploaded by

    BOBBY SINHA
    The document outlines a system to calculate yearly bonuses and long-term incentive plan (LTIP) payouts for employees. It defines the variables and formulas needed to calculate an employee's target bonus for a given year based on their salary and target achievement from the previous year, as well as how much they contribute annually to their LTIP pot and how the LTIP payout is calculated based on contributions from the past 4 years. Sample data on employee and salary information is also provided to demonstrate how the calculations would work.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    You are on page 1of 7

    LTIP Bonus and Yearly Bonus Calculation

    Objective

    Design a system to:


    I. Calculate employee’s yearly bonus
    II. Calculate yearly LTIP bonus payout
    For 1000 employees
    Sample Data
    Salary Table
    Year(n) Salary Target Achieved
    1 40000 25
    2 42000 20
    ….. ….. …..
    Employee Table 16 45000 20
    Employee Employee Name Year of Joining
    ID
    101 Anthony 2005 Year(n) Salary Target Achieved
    102 Benjamin 2020 1 40000 25
    103 Chadwick 2018
    104 Dillian 2012
    Year(n) Salary Target Achieved
    1 40000 25
    2 42000 20
    3 43000 22

    • For year 2021, Employee: Benjamin


    • N = Current year - Year of Joining + 1 = 2021 – 2020 + 1 = 2; hence 2021 is Benjamin’s Nth year in the firm in this case 2 nd year
    • All the bonus calculation will be on his previous year, n = N - 1 in this case 1 st year
    Variables

    No Description Variable
    1 Employees Current Year N
    2 Calculations to be made for previous year (N-1) n
    3 Target % achieved for previous year target(n)
    4 Annual salary for previous year salary(n)
    5 Target bonus earned target_bonus(n)
    6 LTIP pot contribution of year n LTIP_pot(n)
    7 LTIP payout LTIP_payout(n)

    1. Target_bonus(n) to be paid to the employee on March, Year N


    2. LTIP_payout(n) to be paid to the employee on October, Year N
    Logic and Formula

    I. target_bonus(n) II. LTIP_pot(n)

    salary(n), target(n)
    Yes   Is
    No

    F{salary(n), target(n)} target_bonus(n)

    𝒔𝒂𝒍𝒂𝒓𝒚
      (𝒏) ×(𝒕𝒂𝒓𝒈𝒆𝒕 (𝒏)/ 𝟏𝟎𝟎)

    f{target_bonus(n)}
    target
      _ bonus ( n ) ×𝟎 . 𝟓 0

    Calculated Value
    Calculated Value
    Thank you
    Logic and Formula

    I. LTIP_payout(n)

    LTIP_pot

    F{LTIP_pot}

    LTIP_pot(n)×0.1 + LTIP_pot(n-1)×0.2 +
    LTIP_pot(n-2)×0.3 + LTIP_pot(n-3)×0.4

    Calculated Value

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