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Company Value

Company value is a function of industry, type of acquisition (strategic or financial), company profit and the stock price or value multiplier (if a private company).

Premise
Employee Engagement will increase the enterprise value by affecting revenue, profit, quality of employee, efficiency, effectiveness, ease of operation and, by association, the stock price or value multiplier.

Correlated Measureable Evidence

  • Performance ScoreCards linked to pay consist of leading and lagging indicators
  • Engagement survey scores consist of lagging indicators
  • Financial Statements consist of lagging indicators

 

Engagement Survey Scores

Category Base 12 months +/- change
Learning Organization 66.5 79.4 12.9
Roles 64.8 73.8 9
Business Understanding 71.3 77 5.7
Systems/Processes 61.6 72.9 11.3
Work Environment 58.2 73.1 14.9
Participation 56.5 72 15.5
Authority 55.4 71.6 16.2
Customer Satisfaction 80.2 85.2 5
Results Orientation 69.3 77.7 8.4
Rewards 59 72.7 13.7
Employee Satisfaction 59.7 72 12.3
Goals & Objectives 70.6 76.7 6.1
Weighted Average Score 64.42 75.35 10.93

Earnings gain over threshold $9,750,000
    Basis Point Value $ 195,000
    Basis Points over Threshold 50
Total Incentive Paid $1,471,549
ROI 6.6:1

 

Assumption
The higher the profit, the greater the stock price or value multiplier.
Example:

Profit = $4 M creates a value multiplier of 2.5
Profit = $6 M creates a value multiplier of 3.0 or 3.25

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