[RE-POST - typos in original post]
Doctornoh - Management are incentivized more by sales and earnings rather than balance sheet metrics. They have more control over the P&L via non-cash charges like depreciation and amortisation compared to sales and operating margins.
The choice is simple.....either continue with the profit share, which from an NPAT point of view halves the net margin contribution from Fonda every year, or take a balance sheet hit now and then amortize the buyout asset against the full earnings.
My guess is that the amoritisation charge will be less than 50% of actual net annual sales, which if true would incentivize management to buy, rather than share Fonda. They get rewarded quicker against short term KPO's.
All IMHO.
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