||Cooperatives face unique challenges in compensating managers because
it is more difficult to link the financial interests of the manager to
those of the cooperative. One way to overcome this challenge is to use
performance-based bonuses. This study of cooperatives in Minnesota and
Wisconsin found that such bonuses are infrequently used. Further, evidence
indicates that existing bonuses tend to be linked more to the size of the
cooperative (sales, assets) than to profitability. These results suggest
that more attention to this critical area is warranted.