How would you allocate bonuses to these four analysts

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Question - Play the role of a Raven portfolio manager who has to allocate a bonus pool to the four analysts working for him. Assume that Raven earns a 20% incentive fee and that all of the 2009 returns were above the funds' high water marks. Use 30% of the incentive fee as the bonus pool to be allocated to the four analysts whose backgrounds and 2009 portfolio performances are described in "Background Information about Four Raven Analysts" and "Information on the Performances of Portfolios" on pages 2 and 3 of these instructions.

-How would you allocate bonuses to these four analysts? What alternatives did you consider? Why did you make the choices you did? 

-Is there any other information you would like to have had available before making your decisions? If so, what? 

-Do you think you should pay out the entire bonus pool this year, or hold some money in a "bonus bank reserve"? Why or why not? 

-Should the proportions of the bonuses allocated vary depending on the size of the bonus pool available? Redo the allocations of the bonus pool to these four analysts assuming that because of a high water mark constraint, the incentive fees earned in 2009 were only $300,000.

Reference no: EM132938891

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