Incentive Compensation Plan
Division of Bond Finance
An incentive compensation plan for the Division of Bond Finance is hereby created and shall be effective
as of July 1, 2015.
Each fiscal year the Division Director will include in the Division' s annual budget a maximum amount
that may be paid as incentive compensation for that fiscal year. The maximum amount shall be
determined based upon the percentages of salaries as shown in the Attachment. The total amount of
the incentive compensation earned and available to be paid and the distribution of such amount will be
determined as set forth below. The distribution, if any, shall be paid prior to the end of the fiscal year.
The plan will be based upon:
1) selling new money bonds at a true interest cost rate below the true interest cost rate of
the applicable TM3 Municipal Market Data index or the relevant Bloomberg benchmark
interest rate scale as reported to the Governor and Cabinet; and,
2) savings derived from issuing refunding bonds.
Calculation of incentive compensation:
1) incentive compensation based upon a lower true interest cost rate than the benchmark
interest rate will be calculated as follows:
a. calculate the debt service for a bond issue which would result from using the
applicable TM3 Municipal Market Data index or the relevant Bloomberg
benchmark interest rate scale;
b. compare the above calculated debt service to the actual debt service on the
bonds from the winning bid and calculate the present value difference using the
true interest cost rate of the actual bond issue;
c.
multiply any present value savings by 2.0%;
d. the product of the above calculation shall be credited as incentive
compensation.
2) incentive compensation based upon savings derived from issuing refunding bonds will
be calculated as follows:
a.
calculate the present value of the savings derived from the sale of a refunding
bond issue;
b. multiply the present value savings by 20 basis points (0.2%);
c.
the resulting product shall be credited as incentive compensation.
Distribution of earned incentive compensation:
The earned incentive compensation amount will be distributed to individual employees based on the
percentage of their salary as shown in the Attachment and based on their current salary levels;
however, if the total amount of incentive compensation earned is less than the maximum amount, each
employee's distribution will be set proportionally to the maximum amount available.
Attachment #6
Attachment to Incentive Compensation Plan
%of
Position
Salary
Director
50.00%
Chief of Bond Programs
35.00%
Manager of Arbitrage
35.00%
Bond Dev. Supervisor
35.00%
Bond Dev. Specialists
35.00%
Manager of Legal
25.00%
Sr. Attorneys
25.00%
Discretionary Amount
$30,000