Household Brands Incorporated (HBI) manufactures household g…
Household Brands Incorporated (HBI) manufactures household goods in the United States. The company made two acquisitions in previous years to diversify their product lines. In 2011, HBI acquired cosmetics and consumer electronics companies. HBI is now, in 2022, comprised of three divisions: cosmetics, household, and consumer electronics. The following information (in thousands of dollars) presents operating revenues, operating income, and invested assets of the company over the last three years: Revenue Operating Income Assets Cosmetics 2020 $ 26,800 $ 2,800 $ 9,600 2021 19,600 1,900 9,300 2022 20,000 1,800 9,250 Household 2020 16,000 1,600 7,560 2021 15,300 1,100 8,140 2022 10,400 870 6,500 Electronics 2020 14,000 1,400 4,350 2021 9,540 1,600 4,640 2022 8,960 1,040 4,320 Household Brands Total 2020 56,800 5,800 21,510 2021 44,440 4,600 22,080 2022 39,360 3,710 20,070 The current compensation package is an annual bonus award. The senior executives share in the bonus pool. The pool is calculated as 20% of the annual residual income of the company. The residual income is defined as operating income minus a cost of capital charge of 15% of invested assets.The total amount of the bonus pool for 2021 is:
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