trying to figure out a plug n play type solution for a company to payout a bonus to an employee. Variables: Employee gets a bonus (ie. 3%) of positive net revenue and paid out 33% per year for 3 years. For example: net revenue is $300,000, so bonus would be 9K, but only 3K paid out per year. year 2, 300K revenue again, so bonus paid out would be 6K (3K from year one and 3K from year 2). I can get this no problem. The problem is this next variable:
If the company has a loss in a year then no bonus is paid out. This by itself, no problem. However, the company needs to get back to even before a bonus is paid out again. For example, year 1 loss is -$500,000 (no bonus paid), year 2 gain of $200,000 (still 300K below the watermark so no bonus paid), year 3 gain of $200,000 (still 100K below the watermark so no bonus paid), year 4 gain of $300,000 (100K goes to recovering the loss from year 1 and 200K gets a bonus paid out. Might make it even more difficult if there are multiple years of losses consecutively or loss one year, followed by a gain, followed by another loss, etc... (keeping track of everything).
I would like to figure out some sort of formula to allow the company the ability to play around with their projected net revenue numbers to see how it would affect the bonus paid out.
Thanks
If the company has a loss in a year then no bonus is paid out. This by itself, no problem. However, the company needs to get back to even before a bonus is paid out again. For example, year 1 loss is -$500,000 (no bonus paid), year 2 gain of $200,000 (still 300K below the watermark so no bonus paid), year 3 gain of $200,000 (still 100K below the watermark so no bonus paid), year 4 gain of $300,000 (100K goes to recovering the loss from year 1 and 200K gets a bonus paid out. Might make it even more difficult if there are multiple years of losses consecutively or loss one year, followed by a gain, followed by another loss, etc... (keeping track of everything).
I would like to figure out some sort of formula to allow the company the ability to play around with their projected net revenue numbers to see how it would affect the bonus paid out.
Thanks
