Our client, a retail company operating in the e-commerce sector, wished to set up a profit-sharing plan for the company’s managers in order to incentivise them to develop the business activity.
Profit-sharing plans for company managers are usually implemented to involve managers in the development of the company and motivate them to achieve objectives. In order to set up profit-sharing schemes, it is necessary to carry out a valuation exercise to estimate the market value of the company’s equity. To value a company with different business segments, a sum-of-the-parts approach is more typical as it makes it possible to take into account the operational specificities and risk of each business line.
