Page 1 of 4
Wealth Creation evaluates your ability to create wealth during your tenure as Management. It examines three measures:
- Cumulative Profits, the sum of all company profits;
- Cumulative Free Cash Flow, the sum of all of the Free Cash Flows since you took over management of the company;
- Market Capitalization, the current value of your stock price times shares outstanding.
Each measure is worth up to 33 1/3 points. Since we are looking at accumulated wealth, the targets increase each year:
Cumulative Profits ($M) Cumulative Free Cash Flow ($M) Market Capitalization ($M)Year 1 $6 $7 $60 Year 2 $14 $10 $66 Year 3 $24 $15 $78 Year 4 $36 $22 $88 Year 5 $52 $31 $110 Year 6 $73 $42 $140 Year 7 $100 $55 $180 Year 8 $135 $70 $234
If you do not reach the target, you can still earn points. For example, if your Year 4 Cumulative Profits is $18 million, it would earn
$18/$36 * 33 1/3 points = 16.65 points