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Bonuses


It might seem obvious that it would be in any company's interest that bonuses of top management would be linked to the company’s profitability. The problem with this is that Executives whose bonuses rise in tandem with earnings per share have strong incentive to generate bona fide earnings but also have an incentive to use every lawful means of inflating figures. Even though it is becoming more and more difficult for companies to falsify their performance, in Vietnam or elsewhere, there is still some room for interpretation in financials that can allow that kind of practice.


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