1. The investor expectations standard. The investor expectations standard involves calculating an
annual “Investor Expectation Score” based on your company’s success in meeting or beating each
year’ expected performance targets for EPS, return on equity or ROE, credit rating, image rating, and
stock price appreciation. There is also a Game-to-Date or “all-years” Investor Expectation Score that
shows your company’s success in achieving or exceeding the five expected performance targets over
all years of the exercise completed so far. Meeting each expected performance target is worth some
number of points based on the scoring weight your instructor selected. For example, if the scoring
weight for EPS is 20% or 20 points, meeting the EPS target earns a score of 20 on the EPS
performance measure. Beating a target results in a bonus award of 0.5% for each 1% the annual
target is exceeded (up to a maximum bonus of 20%). Thus, if achieving the EPS target is worth 20
points, a company can earn a score of 24 points by beating the annual EPS target by 40% or more.
Failure to achieve a target results in a score equal to a percentage of that target’s point total (based
on its weight out of 100 points). For instance, if your company earns $1.33 per share of common
stock at a time when the EPS target is $2.67 and achieving the $2.67 EPS target is worth 20 points,
then your company’s score on the EPS target would be 10 points (50% of the 20 points awarded for meeting the EPS target). Exactly meeting each of the 5 performance targets results in an Investor
Expectation Score of 100. With potential point bonuses of up to 20% for exceeding each performance
target, it is possible to earn an Investor Expectation Score of 120.