Accelerated vesting allows an employee to quicken the schedule by which one gains access to company stock or stock options as an incentive.

Accelerated vesting allows an employee to speed up the schedule for gaining access to restricted company stock or stock options issued as an incentive. Aside from simply offering better compensation to highly valued employees, a company, especially a young company or startup, might use accelerated vesting to make itself more attractive to an acquiring company. Accelerated vesting allows an employee to speed up the schedule for gaining access to restricted company stock or stock options issued as an incentive. The benefit to the employees creates potential issues for the company, including the risk that the employee will take the money and leave the company shortly after that. Employees stock or stock option plans provide incentives for employees to perform at a higher level and remain with the company longer.

Accelerated Vesting

An actuary is a professional who assesses and manages the risks of financial investments, insurance policies, and other potentially risky ventures.

An actuary assesses and manages the risks of financial investments, insurance policies, and other potentially risky ventures. While actuarial science is most commonly applied to mortality analysis for life insurance, many of the same procedures are also used for property, liability, and other kinds of insurance. While primarily used for insurance policies and investments, actuarial science is applicable in any situation where risk and uncertainty are present. Public and private institutions rely heavily on actuarial science to determine the relative risk of various decisions; as such, actuaries are trained and tested extensively before they are allowed to practice. An actuary assesses and manages the risks of financial investments, insurance policies, and other potentially risky ventures.

Actuary

Agency automatic contributions are contributions made by the federal government to an employee's TSP that equals 1% of their pay.

Agency automatic contributions are contributions made by the federal government to an employee's Thrift Savings Plan (TSP) that equals 1% of their pay. For example, if a federal employee elects to make a 5% contribution toward their thrift savings plan, they will receive an equivalent amount from the government (assuming that the 1% contribution automatically gained from the agency automatic contributions is added to the 4% gained from the agency matching contributions.)
A thrift savings plan (TSP) is a type of defined-contribution retirement investment program open to federal employees and members of the uniformed services, including the Ready Reserve. Agency automatic contributions are contributions made by the federal government to an employee's Thrift Savings Plan (TSP) that equals 1% of their pay. Most commonly, this feature is in 401(k) plans, but it can also be included in the following types of plans that permit employees to make elective contributions: 403(b) plans, 457(b) plans, SARSEPs, and SIMPLE IRA plans. If you are a federal employee, your agency or service will contribute an amount equal to 1% of your basic pay each pay period to your thrift savings plan (TSP) account.

Agency Automatic Contributions

Aguinaldo is an annual Christmas bonus that businesses in Mexico and other Latin American nations are required to pay to their employees.

Everything you need to know about the 'Aguinaldo' payment

El Aguinaldo is a new concept for retirees

How to Calculate the Christmas Bonus / Aguinaldo in Mexico

Your Domestic Staff and the Aguinaldo Deadline

The term _aguinaldo_ refers to an annual Christmas bonus that businesses in Mexico are required by law to pay to their employees. Employees are not required to pay income tax on their aguinaldo payment of an amount equivalent to 30 days of the legal daily minimum wage. Mexican labor laws require employers to pay their employees a bonus or an aguinaldo every year. The term _aguinaldo_ refers to an annual Christmas bonus that businesses in Mexico are required by law to pay to their employees. Employers who don't pay, pay late, or make partial payments to their employees can be fined as much as 5,000 times the minimum wage if they're reported.

Aguinaldo

Back pay is the salary and benefits an employee is owed by a former employer after a wrongful termination or a change in salary or status. 

Table of Contents
What Is Back Pay?
How Back Pay Works
Reasons for Back Pay
Special Considerations
Collecting Back Pay
Example of Back Pay
Back Pay FAQs
The Bottom Line
Back pay is the amount of salary and other benefits that an employee claims that they are owed after a wrongful termination or another improper change in salary status. Some other reasons you might be owed back pay:
Minimum wage violations
Unpaid overtime
Unpaid bonuses or commissions
Wage theft/tip theft
Misclassification (categorizing hourly workers as salaried workers)
Discrimination in salaries or promotions (for example, if you are passed over for promotions due to membership in a protected class).
Accounting errors
The statute of limitations for back pay claims is two years for unintentional violations, or three years for willful underpayment. One way to protect against this risk is to add an employment practices liability insurance endorsement to their business owner policy (BOP).
The Fair Labor Standards Act (FLSA), the Davis-Bacon Act and the Service Contract Act (among other laws) include provisions for recovering back pay. If an employee makes a successful claim for back pay, the insurer will pay the amount owed.

Back Pay

Base pay is an employee's initial rate of compensation, excluding extra lump sum compensation or increases in the rate of pay. 

Fact Sheet 17U: Nondiscretionary Bonuses and Incentive Payments (Including Commissions) and Part 541 Exempt Employees

Military Compensation, Annual Pay Adjustment

Base pay is the initial salary paid to an employee, not including any benefits, bonuses, or raises. Base pay does not include all forms of compensation; for instance, shift differential pay, on-call pay, special assignments, and incentive-based pay are typically excluded from base pay. Annual increases to a member's base pay are calculated by measuring the increase in private-sector wages and salaries as reflected in the employment cost index (ECI).
E-5 base pay is the standard compensation received by an enlisted member of the U.S. military with the E-5 pay grade. Generally, an employee's base pay is the minimum amount they should expect to receive during a specified pay period, excluding additional financial or tangible compensation that may increase the total pay above this level. In contrast to hourly employees who are compensated for the exact number of hours they work in a pay period, a salaried employee is usually expected to work a minimum number of hours in exchange for his base pay.

Base Pay

A blue-collar worker is typically a working-class person historically defined by hourly rates of pay and manual labor.

Average Salary for Class of 2019 up Almost 6 Percent over Class of 2018

May 2019 National Occupational Employment and Wage Estimates United States

The term "blue-collar" refers to a type of employment. Other types of colored collar categories of workers include pink collar, green collar, gold collar, and gray collar. Since most blue-collar jobs pay by the hour, working overtime could mean that a blue-collar worker can earn six figures in any given year. Blue-collar workers are in contrast to white-collar employees, men (and increasingly women) who held salaried positions and performed non-manual labor in an office setting—and invariably wore clean, pressed white shirts, which they could afford to launder frequently. Originally, a blue-collar job did not require the worker to have much education or even expertise in the slated job field—again, in contrast to a white-collar position, which demanded at least a high-school diploma and, in later decades, some college.

Blue Collar

A bonus is a financial reward beyond what was expected by the recipient. Learn how companies reward employees with incentive and performance bonuses.

Publication 525 (2019), Taxable and Nontaxable Income

A bonus is a financial compensation that is above and beyond the normal payment expectations of its recipient. Incentive bonuses include signing bonuses, referral bonuses, and retention bonuses. Examples of reward bonuses include annual bonuses, spot bonus awards, and milestone bonuses. While bonuses are traditionally issued to high-performing, profit-generating employees, some companies opt to issue bonuses to lower-performing employees as well, even though businesses that do this tend to grow more slowly and generate less money. A company may use bonuses to reward achievements, to show gratitude to employees who meet longevity milestones, or to entice not-yet employees to join a company's ranks.

Bonus

A break in service is the loss of benefits when an employee returns to a company over 13 weeks after they left and must wait to become eligible again.

§54.4980H-3 Determining Full-Time Employees

§1.410(a)-5 Year of Service; Break in Service

A break in service is the loss of benefits when an employee returns to a company more than 13 weeks after they left and must wait to become eligible again. The ACA allows an employer to apply a “rule of parity,” which means they can treat a rehired employee as a new hire if the break in service is longer than the period worked prior to leaving. A returning employee deemed a new hire must work for a determined period before being eligible for benefits, hence, the break in service. The “rule of parity” says a rehired employee can be treated as a new hire if the break in service is longer than the period worked prior to leaving. A break in service for a pension happens if there’s a one-year break in service before working for five years.

Break In Service

Being "brought over the wall" is when a research employee of an investment bank is lent to the underwriting department to focus on a particular company.

Laws Separating Commercial Banking and Securities Activities as an Impediment to Free Trade in Financial Services: A Comparative Study of Competitiveness in the International Market for Financial Services

Federal Court Approves Global Research Analyst Settlement

Being "brought over the wall" is when an employee in the research department of an investment bank—usually a research analyst—is brought over to work for the underwriting department in order to focus on a particular company. The term itself references the division between the analysts of an investment bank and the bank's underwriting department. The research analyst lends their expert opinion on the company, which helps underwriters become better informed during the underwriting process. Regulators discovered that big-name analysts were privately selling personal holdings of the stocks they were promoting and had been pressured into providing good ratings (despite personal opinions and research that indicated otherwise). The practice of bringing analysts over wall carried on unquestioned for decades until the 1990s dotcom boom and bust brought it back into the spotlight.

Brought Over the Wall

Bullet dodging is a shady employee stock option granting practice, in which grants are delayed until after bad news about the company has been made public.

The term bullet dodging refers to an unethical employee stock options practice that delays the release of the options until a negative piece of news involving the company is made public, thus causing the stock's price to fall. Another fraudulent practice is known as options backdating, in which options are granted with a date prior to the actual issuances of the option, so the exercise price can be set at a lower price than that of the company's stock at the granting date. Bullet dodging is an employee stock options practice in which the options release is delayed until a negative press release comes out, causing the stock's price to drop and granting employees an optimal entry point. The term bullet dodging refers to an unethical employee stock options practice that delays the release of the options until a negative piece of news involving the company is made public, thus causing the stock's price to fall. Because an option's exercise price is linked to the underlying stock's price when it is issued, waiting for the stock price to drop allows option holders to benefit from a lower exercise price.

Bullet Dodging

The burden rate is the indirect costs associated with employees, over and above gross compensation or payroll costs.

The burden rate consists of indirect costs associated with employees, or inventory, over and above gross compensation or payroll costs. Because total labor costs (including the burden rate) may be as much as 50% higher than base payroll costs alone, it is necessary to calculate the burden rate accurately to get a better picture of profitability and efficiency per worker. Typical costs associated with the burden rate include payroll taxes, workers' compensation, health insurance, paid time off, training, travel expenses, vacation, and sick leave, pension contributions, and other benefits. The most commonly required burden rate expenses are the various payroll taxes, such as those associated with Social Security, Medicare, unemployment, and any additionally mandated workers' compensation required by the federal government or the state the business is operating in. The burden rate consists of indirect costs associated with employees, or inventory, over and above gross compensation or payroll costs.

Burden Rate

A cash bonus is a lump sum of money typically awarded as in incentive for an employee's superior performance.

https://www.irs.gov/publications/p15#en_US_2019_publink1000202352

A cash bonus refers to a lump sum of money awarded to an employee, either occasionally or periodically, for good performance. Cash bonuses can impact the economy—high cash bonuses can lead to a spike in demand for luxury items.
A cash bonus for better-than-expected performance may be awarded to an individual, division, or the entire organization depending on the level at which performance targets were exceeded. The amount of a cash bonus can vary based on the employee's job, and is normally paid out by the company at the end of the year, which is why they are often called annual or year-end bonuses. Most cash bonuses are paid once a year and can range from a few hundred to millions of dollars, depending on the employee's position and the company. For example, in financial centers like New York and London, high cash bonuses that are paid when the economy is booming can lead to a spike in demand for luxury items such as sports cars.

Cash Bonus

A cash allowance is an expense that is repaid immediately in cash, instead of being reimbursed at a later date.

In financial accounting, a cash allowance refers to an expense that is repaid immediately in cash, instead of being reimbursed at a later date. A common example of a cash allowance is the use of a petty cash account. In financial accounting, a cash allowance refers to an expense that is repaid immediately in cash, instead of being reimbursed at a later date. For example, if an employee receives an annual cash allowance of $10,000 for work-related expenses in addition to an annual salary of $75,000, their taxable income would be $85,000 ($75,000 + $10,000). The employee can then claim work-related expenses against their income of $85,000 at tax time.
Setting a cash allowance depends on the following factors:
**Assignment Time**:

Cash Allowance

Cash awards are awards given to employees in the form of money or another asset, such as stock, that can be turned in for cash. 

Cash awards are awards given to employees in the form of money or another asset, such as stock options, that can be turned in for cash. Cash awards are awards given to employees in the form of money or another asset, such as stock options, that can be turned in for cash. Cash awards are awards given to employees in the form of money or other assets that can be turned in for cash. Cash awards are given to employees for meeting or exceeding goals for a special project or their regular job functions, on an anniversary date, or even the holidays. Handing out a cash award can incentivize an employee to stick with the company through hard times, even though they may be receiving job offers elsewhere.

Cash Awards

A chief technology officer (CTO) is an executive responsible for the management of an organization's technological needs.

Average Chief Technology Officer (CTO) Salary

Computer and Information Systems Managers Summary

Table of Contents
What Is a Chief Technology Officer? A chief technology officer (CTO) is the highest technology executive position within a company and leads the technology or engineering department. A chief technology officer (CTO) is responsible for overseeing the development and dissemination of technology for external customers, vendors, and other clients to help improve and increase business. Originally a chief information officer (CIO) previously performed dual roles as CIO and chief technology officer (CTO). The CTO usually reports directly to a company's chief information officer (CIO), but may also report to the chief executive officer (CEO) of the firm.

Chief Technology Officer (CTO)

Collective bargaining is the process of negotiating terms of employment between an employer and a group of workers.

Collective bargaining is the process of negotiating the terms of employment between an employer and a group of workers. Supporters of public-sector collective bargaining counter that any worries about runaway pay are unfounded and that public-sector employees covered by collective bargaining agreements earn, at most, 5% more than their nonunion peers. Roughly 10.3% of U.S. workers are union members, where 33.6% of public sector workers are unionized, versus 6.2% for the private sector. Categories of workers that belong to unions include grocery store employees, airline employees, professional athletes, teachers, auto workers, postal workers, actors, farmworkers, steelworkers, and many more. Unionization is much more prevalent in the public sector, with 33.6% of these workers unionized, compared to only 6.2% of workers in the private sector.

Collective Bargaining

Combat pay is a monthly stipend in addition to base pay that is paid to members of the armed services who are serving in designated hazardous zones.

Hostile Fire/Imminent Danger Pay (HFP/IDP)

Savings Deposit Program: The 10% Solution

Combat pay is a tax-exempt monthly stipend paid to all active members of the U.S. armed services who are serving in designated hazardous zones. Countries and areas designated as combat zones include:
Afghanistan
Philippines
Federal Republic of Yugoslavia
Adriatic Sea
Persian Gulf
The entire land area encompassing Iraq, Kuwait, Saudi Arabia, Oman, Bahrain, Qatar, and the United Arab Emirates
As of 2021, the United States has four active combat zones approved for tax benefits by the Internal Revenue Service: the Sinai Peninsula, the Afghanistan area, the Kosovo area, and the Arabian Peninsula area. Members of the armed services qualify for combat pay if they are subject to—or wounded by—hostile fire or explosive mines, or on duty on foreign soil and subject to the threat of physical harm or imminent danger due to civil unrest, civil war, terrorism, or wartime conditions.
Combat pay is open to more than combat soldiers. Combat pay can be categorized as hostile fire pay and imminent danger pay, and it is prorated for partial months. Combat pay is a tax-exempt monthly stipend paid to all active members of the U.S. armed services who are serving in designated hazardous zones.

Combat Pay

Employers provide dependent care benefits to employees for use in caring for dependents, such as young children or disabled family members.

Topic No. 602 Child and Dependent Care Credit

Comparative Chart of Paid Family and Medical Leave Laws in the United States

Dependent care benefits are provided by an employer to an employee for use in caring for dependents, such as young children or disabled family members. The IRS provides a child and dependent care tax credit to eligible taxpayers who paid child or dependent care expenses for the tax year. A dependent care flexible spending account is available for individuals who care for a child or adult who is incapable of self-care, who lives in the taxpayer's home for at least eight hours each day, and who can be claimed as a dependent on an income tax return. The child and dependent care credit is a tax credit available to taxpayers who paid for the care of their child, spouse, or dependent so they can work or look for work. Dependent care benefits include tax credits and employee benefits, such as daycare allowances, for the care of their dependents.

Dependent Care Benefits

An unemployment insurance program in Canada that allows individuals who have recently lost a job to receive temporary financial assistance.

EI Maternity and Parental Benefits: What These Benefits Offer

EI Maternity and Parental Benefits: Eligibility

EI Sickness Benefits: What These Benefits Offer

EI Caregiving Benefits and Leave: What Caregiving Benefits Offer

Employment Insurance (EI) is an unemployment insurance program in Canada that allows individuals who have recently lost a job to receive temporary financial assistance. These benefits include not only maternity and parental care benefits but also 26-weeks of compassionate care benefits, for those citizens who have to leave work to care for a dying loved one. To qualify for benefits, individuals must work a certain number of hours, and the length of time for which benefits are provided depends on an individual's geographic region's unemployment rate.
Employment insurance offers a wide range of benefits to those who qualify for them.
Employers contribute 1.4 times the amount of employee premiums. EI also offers compassionate care benefits, which are paid to people who have to be away from work temporarily to provide care or support to a family member or who is gravely ill themselves with a significant risk of death. EI maternity benefits are offered to biological mothers, including surrogate mothers, who cannot work because they are pregnant or have recently given birth and parents of a newly adopted child.

Employment Insurance (EI)

An employee stock option (ESO) is a grant to an employee giving the right to buy a certain number of shares in the company's stock for a set price.

Putting Too Much Stock in Your Company—A 401(k) Problem.

Facebook, Inc. Class A Common Stock (FB) Historical Data.

Table of Contents
Expand Remember that intrinsic value—which can never be negative—is zero when an option is “at the money” (ATM) or “out of the money” (OTM); for these options, their entire value therefore consists only of time value.
The exercise of an ESO will capture intrinsic value but usually gives up time value (assuming there is any left), resulting in a potentially large hidden opportunity cost. If you now sell these 500 shares at $50, you can only apply $3,000 of these losses in the same tax year, with the rest to be applied in future years with the same limit
To summarize:
You paid $10,000 in compensation tax at exercise
Locked in $2,500 in after-tax gains on 500 shares
Broke even on 500 shares, but have losses of $12,500 that you can write off per year by $3,000
Note that this does not count the time value lost from early exercise, which could be quite significant with five years left for expiration. If you are awarded at-the-money ESOs with a term of 10 years, their intrinsic value is zero, but they have a substantial amount of time value, $23.08 per option in this case, or over $23,000 for ESOs that give you the right to buy 1,000 shares.
2.  Option time decay is not linear in nature. While time value can be easily calculated for exchange-traded options, it is more challenging to calculate time value for non-traded options like ESOs, since a market price is not available for them.

Employee Stock Option  (ESO Calculation)

An employee stock purchase plan (ESPP) is a company-run program in which participating employees can buy company shares at a discounted price. 

An employee stock purchase plan (ESPP) is a company-run program in which participating employees can purchase company stock at a discounted price. An employee stock purchase plan (ESPP) is a company-run program in which participating employees can purchase company stock at a discounted price. _An ESPP is a program in which employees can purchase company stock at a discounted price._
_Employees contribute through payroll deductions, which build until the purchase date._
_The discount can be as much as 15% in some cases._ At the purchase date, the company uses the employee's accumulated funds to purchase stock in the company on behalf of the participating employees. With employee stock purchase plans, the discount rate on company shares depends on the specific plan but can be as much as 15% lower than the market price.

Employee Stock Purchase Plan (ESPP)

An evergreen option is a type of employee stock option plan in which additional shares are automatically granted to the plan every year.

Publication 525: Taxable and Nontaxable Income

An evergreen option is a provision of some employee stock option plans (ESOPs) in which additional shares are automatically granted to the plan every year. For example, if a company has 75 million outstanding shares and a 5% evergreen option provision, the company could issue 3.750 million shares in compensation in the first year. Current shareholders who do not receive evergreen options have a smaller ownership in the company because the total number of shares outstanding has increased, but their shareholding has remained the same. Evergreen options allow for employees with stock options plans to automatically receive additional shares each eligible year. An evergreen plan uses a percentage of the company's common shares outstanding to determine how many options to grant.

Evergreen Option

Fringe benefits are additions to employee compensation, such as paid time off or use of a company car. Some benefits are taxable as income.

Publication 15-B (2020), Employer's Tax Guide to Fringe Benefits

As of 2019, the list of fringe benefits excluded from income taxes includes:
Accident and health benefits
Achievement awards (up to $1,600 for qualified awards)
Adoption assistance
Athletic facilities
Commuting benefits
De minimis (minimal) benefits
Dependent care assistance
Educational assistance
Employee discounts
Employee stock options
Employer-provided cell phones
Group-term life insurance coverage Recipients of taxable fringe benefits are required to include the fair market value of the benefit in their taxable income for the year. Some of the most common fringe benefits like health and life insurance are not taxable but others are taxed at fair market value. These include health insurance, life insurance, tuition assistance, childcare reimbursement, cafeteria subsidies, below-market loans, employee discounts, employee stock options, and personal use of a company-owned vehicle.

Fringe Benefits

Funemployment refers to unemployed individuals who decide to enjoy the free time that unemployment provides.

These Out-of-Work Professionals Made ‘Funemployment’ Work for Them

Unemployment rose higher in three months of COVID-19 than it did in two years of the Great Recession

The term funemployment refers to a period of time when individuals decide to enjoy the free time that comes with being unemployed. Funemployment is a period of time when individuals decide to enjoy the free time that comes with being unemployed until they find a new job. The term funemployment refers to a period of time when individuals decide to enjoy the free time that comes with being unemployed. This term was coined during the Great Recession between 2007 and 2009 when approximately 8.8 million U.S. workers filed for unemployment.﻿﻿ The slang term stuck, and some individuals may opt to take a period of funemployment to plot their next career move or take a break from working to enjoy other aspects of life. Individuals who hold industry licenses and certifications may not be able to renew these while funemployed, making it difficult to re-enter the workforce.
But there are certainly pitfalls to taking in a period of funemployment, especially when it comes to someone's financial standing.

Funemployment

Garnishment refers to a legal process that instructs a third party to deduct payments directly from a debtor’s wage or bank account.

Fact Sheet #30: The Federal Wage Garnishment Law, Consumer Credit Protection Act’s Title III (CCPA)

Garnishment, or wage garnishment, is when money is legally withheld from your paycheck and sent to another party. The Consumer Credit Protection Act sets the limits for what can be garnished from wages, except for unpaid taxes, delinquent child support, bankruptcy orders, defaulted student loans, and voluntary wage assignments. Garnishment limits set by the Consumer Credit Protection Act do not apply to unpaid tax debt, child support, bankruptcy orders, student loans, or voluntary wage allocations. Federal law prohibits employers from firing a worker to avoid processing a garnishment payment.﻿﻿ Garnishments are used for debts such as unpaid taxes, monetary fines, child support payments, and defaulted student loans. The garnishment amount is the lower of the following:
Twenty-five percent of weekly disposable income if the individual’s disposable income is greater than $290.

Garnishment

The glass ceiling is an invisible systemic barrier that prevents women and minorities from rising to senior-level positions within an organization.

She coined the term 'glass ceiling.' She fears it will outlive her

The Phrase ‘Glass Ceiling’ Stretches Back Decades

Labor Force Statistics from the Current Population Survey

Breaking the Glass Ceiling: Structural, Cultural, and Organizational Barriers Preventing Women from Achieving Senior and Executive Positions

The Number of Female CEOs in the Fortune 500 Hits An All-Time Record

Read Hillary Clinton's Concession Speech for the 2016 Presidential Election

Transcript: Hillary Clinton Endorses Barack Obama

The Glass Cliff: Evidence that Women are Over-Represented in Precarious Leadership Positions

Table of Contents
What Is the Glass Ceiling? While the more common glass ceiling presents a barrier to reaching the highest executive levels within their respective organizations, the glass cliff addresses the tendency to place women who have broken through it into precarious positions, making it likely their performance will falter, as if they are at risk of falling off a cliff. But when it came to chief executive positions, women held only 29.9% of these roles, and 88% of chief executives identified as white, according to the Bureau of Labor Statistics (BLS).
Research shows that diverse groups are more successful in making decisions than homogeneous ones, which has the effect of signaling to companies that eliminating the glass ceiling can positively affect their bottom line. The term glass ceiling refers to a metaphorical invisible barrier that prevents certain individuals from being promoted to managerial- and executive-level positions within an organization or industry. The U.S. Department of Labor launched the Glass Ceiling Commission in 1991 in response to the growing concern over barriers preventing women and minorities from advancing.

Glass Ceiling

A golden handshake is a stipulation in an employment contract where an employer agrees to provide a significant severance package if the employee loses their job.

Former RJR Nabisco CEO Johnson Dies, Leaves Controversial Legacy

Deepwater Horizon—BP Gulf of Mexico Oil Spill

Hayward's 'Golden Parachute' is Relatively Modest

Treasury Pick's Wall Street Ties Split Democrats

A golden handshake is a stipulation in an employment agreement which states that the employer will provide a significant severance package if the employee loses their job. A golden handshake is a stipulation in an employment agreement which states that the employer will provide a significant severance package if the employee loses their job. For example, in 2010 British the oil company BP had an oil spill that occurred in the Gulf of Mexico as a result of the explosion of the Deepwater Horizon oil rig. For example in 1989, R.J. Reynolds Nabisco paid F. Ross Johnson over $52 million as part of a golden handshake clause. A golden handshake can also be referred to as a golden parachute.

Golden Handshake

A golden hello is a signing bonus offered to a candidate from a rival company, specifically designed to entice employees of competing firms to leave.

A golden hello is a signing bonus offered to executive-level employees as an inducement to join from a rival company. A golden hello is a bonus offered to executive-level employees as an inducement to join one company from a rival company. A golden hello is a signing bonus offered to executive-level employees as an inducement to join from a rival company. High levels of executive pay remain the norm, including golden hello payments in certain situations, even in the post-financial crisis atmosphere. Any lack of alignment with matters concerning executive compensation may concern longer-term investors, giving them a potential risk to consider when determining whether a company meets its investment criteria.

Golden Hello

A grant is an award, typically financial, from one entity to another, the latter typically an individual, to facilitate a goal or incentivize performance. 

A grant is an award, usually financial, given by one entity (typically a company, foundation, or government) to an individual or a company to facilitate a goal or incentivize performance. A qualified stock option grant, also known as an incentive stock option (ISO), is eligible for a special tax treatment: you don't have to pay income tax when you purchase an option, you instead pay capital gains tax when you sell the option, or taxes on the profits made from the stock option. Non-qualified stock option grants can often be passed on to children or charities and are taxed at the time of purchase, depending on the specific price of the grant and the market value of the stock being granted. If the market price of the stock goes up in value, the grant price is still the same and the employee is purchasing a stock at a lower price than market value when exercising the option. Also, a qualified stock option grant type is sometimes riskier, as the employee must hold on to the option for a longer period of time to qualify for special tax treatment.

Grant

An honorarium is a voluntary payment that is given to a person for services for which fees are not legally or traditionally required. 

Instructions for Forms 1099-MISC and 1099-NEC (2021)

Self-Employment Tax (Social Security and Medicare Taxes)

An honorarium is a voluntary payment that is given to a person for services for which fees are not legally or traditionally required. An honorarium is considered self-employment income and is typically reported with related expenses on Schedule C of IRS Form 1040 for a tax return. For example, one hour of speaking may require three days of work: one day for practicing and improving the speech, another day for travel and deliverance and a third for getting back into the speaker’s normal routine. For example, when a guest makes a speech at a conference, they might receive an honorarium to cover travel expenses. An honorarium is a different type of payment than a per diem, which is a daily allowance paid to employees or consultants to cover business trip expenses, like a hotel stay, travel, and food.

Honorarium

Initial claims is a report that measures the number of jobless claims filed by individuals seeking to receive unemployment benefits.

Initial claims is an employment report that measures the number of new jobless claims filed by individuals seeking to receive unemployment benefits. Initial claims is an employment report that measures the number of new jobless claims filed by individuals seeking to receive unemployment benefits. The weekly release of the initial claims report makes it useful for indicating trends in unemployment between monthly non-farm payrolls and unemployment rate data. Initial claims is a government employment report that tallies the number of individuals seeking unemployment benefits for the first time. It is also watched closely by financial analysts because it provides insight into the health of the economy Initial claims typically rise before the economy enters a recession and decline before the economy starts to recover.

Initial Claims

A junior accountant is an entry-level position in an accounting department. 

A junior accountant maintains and compiles financial reports and statements in compliance with government regulations and requirements. The duties and responsibilities of a junior accountant would vary within the organization but would include accounting for all business transactions with journal entries, updating financial statements, preparing monthly financial reports, calculating payroll taxes, and auditing and maintaining accounts receivable and accounts payable. The junior accountant may analyze balance sheets, manage general ledger accounts, update financial statements, maintain accounts receivable and accounts payable, pay monthly payroll, and prepare financial reports. A junior accountant's duties include posting journal entries, updating financial statements, maintaining accounts receivable and accounts payable, paying monthly payroll, and preparing financial reports. A junior accountant holds an entry-level position in the accounting department of an accounting or auditing firm or the government.

Junior Accountant

A justified wage refers to income determined by market dynamics, work experience, education, and skill.

A justified wage refers to an income level determined by market dynamics, work experience, education, and skill. The divergence between a justified wage and the legal minimum wage may depend on several factors including the state of the economy and level of unemployment. A justified wage is the wage level that is high enough to attract workers but low enough to enable employers to offer employment. A justified wage combines economic factors of supply and demand in the workforce with more social and culturally relevant inputs like work experience, education and skills training, and type of job. The type of work, the skills demanded, experience, job duties, and the general state of the economy all come into play when establishing a justified wage.

Justified Wage

A leveraged employee stock ownership plan (LESOP) uses borrowed money to fund an ESOP as a form of equity compensation for company employees.

A leveraged employee stock ownership plan (LESOP) is an employee compensation program in which the sponsoring company leverages its own credit and borrows the money used to fund the plan and purchase shares from the company's treasury. By leveraging company assets, the business can provide for its stock ownership plan and give workers ownership interest in the company without immediately putting up all the capital required to do so.
LESOPs use the proceeds of bank loans to purchase company stock from the company or its existing shareholders at a sale price established by independent appraisers. A leveraged employee stock ownership plan (LESOP) is an employee compensation program in which the sponsoring company leverages its own credit and borrows the money used to fund the plan and purchase shares from the company's treasury. A leveraged employee stock ownership plan (LESOP) uses borrowed money to fund an ESOP as a form of equity compensation for employees. These shares are then used for the stock ownership plan (ESOP), with the company subsequently paying back the original loan with annual contributions.

Leveraged Employee Stock Ownership Plan (LESOP)

Living wage refers to a theoretical wage level that allows an individual to afford adequate shelter, food, and other necessities.

New Living Wage Data for Now Available on the Tool

$1.60 in 1968—2021 | Inflation Calculator

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Table of Contents
What Is a Living Wage?
How a Living Wage Works
History of the Living Wage
Living Wage vs. Minimum Wage
Living Wage and Poverty Levels
Advantages and Disadvantages
Calculating the Living Wage
Alternatives to a Living Wage This online calculator provides the living wage, minimum wage, and poverty-wage for 50 states plus counties. One alternative to a living wage could be a liveable federal minimum wage that allows individuals and families to earn enough to pay for basic necessities and medical care. Studies show that increasing the minimum wage to $15 would move many states closer to a livable wage but none would actually meet or exceed a livable wage. As such, working and earning the federal minimum wage isn't enough to get out of poverty and not enough money to be classified as a living wage.

Living Wage

A non-qualified deferred compensation is compensation an employee has earned but not received. It's often used as a tax-saving strategy for high earners.

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A non-qualified deferred compensation is compensation that has been earned by an employee but not yet received from their employer. For example, if Sarah, an executive, earned $750,000 per year, her maximum 401(k) contribution of $19,500 would represent only 2.6% of her annual earnings, making it challenging to save enough in her retirement account to replace her salary in retirement.﻿﻿ By deferring some of her earnings to an NQDC, she could postpone paying income taxes on her earnings, enabling her to save a higher percentage of her income than is allowable under her 401(k) plan.
Savings in an NQDC are often deferred for five or 10 years, or until the employee reaches retirement.
NQDCs don’t have the same restrictions as retirement plans; an employee could use their deferred income for other savings goals, like travel or education expenses. Because high-income earners were unable to contribute the same proportional amounts to their tax-deferred retirement savings as other earners, NQDCs offer a way for high-income earners to defer the actual ownership of income and avoid income taxes on their earnings while enjoying tax-deferred investment growth. Another consideration is that if tax rates are higher when the employee accesses their NQDC than they were when the employee earned the income, the employee's tax burden could increase. Because the ownership of the compensation—which may be monetary or otherwise—has not been transferred to the employee, it is not yet part of the employee's earned income and is not counted as taxable income.

Non-Qualified Deferred Compensation (NQDC)

A pay czar clause is a statement in a financial institutions' executive contracts that subjects its compensation terms to U.S. government approval.

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A pay czar clause is a section of boilerplate language added to a financial institution's executive employment contracts that makes the compensation terms subject to approval by the U.S. government. These clauses allow the financial institution to continue to offer attractive bonus plans to their top employees, but also provide the employer with cover in the event that the government blocks the payout, either through regulations or direct intervention.
A pay czar clause makes an employment contract's terms subject to U.S. government approval.
It has been necessary only once when the U.S. government demanded oversight of executive compensation at banks bailed out during the 2008-2009 financial crisis.
For a brief time, the U.S. government had a significant ownership share of the nation's biggest financial institutions. A pay czar clause is a section of boilerplate language added to a financial institution's executive employment contracts that makes the compensation terms subject to approval by the U.S. government. Amid the financial crisis, the Troubled Asset Relief Program (TARP) in 2009 poured some $426 billion in taxpayer money in direct loans into the nation's biggest financial institutions for them to use to cover a short-term cash-flow problem that had reached epic proportions. Wall Street financial firms reportedly paid out a total of $20 billion in bonuses alone in 2009, the year after the bailout.﻿﻿ This included about $1.6 billion paid out to employees of 17 banks bailed out by the government, including Citigroup, Bank of America, and Goldman Sachs.

Pay Czar Clause

Per diem payments are a daily allowance employers give to their employees to cover some or all costs incurred during a business trip.

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Table of Contents
What Are Per Diem Payments? Per diem payments are useful when employees rack up annual business expenses like accommodations, meals, travel, and so on.
Companies may offer per diems in the form of company credit cards, full or partial expense coverage, or fixed daily rates. As noted above, they may issue credit cards, cover full or partial expenses, offer fixed rates, or require employees to cover expenses out of pocket for reimbursement at a later date. If an employee uses his personal car on a business trip, they will be reimbursed according to the Internal Revenue Service (IRS) mileage reimbursement rate—an optional rate used to calculate the deductible costs of operating a vehicle for business purposes. While some companies cover employee expenses in full, some firms only offer per diem payments for partial expenses—specifically for things like lodging, food, and travel.

Per Diem Payments

A performance bonus is a supplemental compensation that an employer offers to employees in exchange for targets met.

A performance bonus is a form of additional compensation paid to an employee or department as a reward for achieving specific goals or hitting predetermined targets. A performance bonus is compensation beyond normal wages and is typically awarded after a performance appraisal and analysis of projects completed by the employee over a specific period of time. A performance bonus is a form of additional compensation paid to an employee or department as a reward for achieving specific goals or hitting predetermined targets. Even if an employee is not guaranteed under contract to receive a performance bonus, they may be instituted at the direction of the employer. Not all companies offer bonus plans and those that do often define the maximum amount that an employee can receive for exemplary performance.

Defining a Performance Bonus

Performance-based compensation is an incentive-based form of compensation that can be paid to portfolio managers. 

Performance-based compensation is an incentive-based form of compensation that can be paid to portfolio managers of investment funds. Performance-based compensation is an incentive-based form of compensation that can be paid to portfolio managers of investment funds. Performance-based compensation is an incentive-based form of compensation paid to portfolio managers of investment funds. Regulated mutual funds with performance-based compensation may add approximately 0.20% to their management fees for performance-based incentives. Within the investment industry, hedge fund managers are most well known for receiving high levels of performance-based compensation.

Performance-Based Compensation

Pink slip is a vernacular term that refers to a notice of dismissal given to an employee.

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Table of Contents
What Is a Pink Slip?
How a Pink Slip Works
How to Handle Termination
Managing Termination in a Company
Origin of the Term
Special Considerations Employees who are issued pink slips may even hold pink slip parties where guests are served pink champagne, pasta in pink sauce, and pink-frosted cake. A white slip of paper meant that the employee was wanted at work the next day, a pink slip meant that their services were no longer required. The Worker Adjustment and Retraining Notification Act (WARN) requires employers with 100 or more employees (generally not counting those who have worked less than six months in the last 12 months and those who work an average of less than 20 hours a week) to provide at least 60 calendar days advance written notice of a plant closing or mass layoff affecting 50 or more employees at a single site of employment. Pink Slip FAQs
The term pink slip is a vernacular term that refers to a notice of dismissal given to an employee.

Pink Slip

Recompense is giving monetary benefit to another as compensation.

Recompense is the act of awarding a target person, group or entity some form of monetary benefit as a result of the target performing some action, or as the result of some action that has happened to the target. In worker compensation cases, companies may be required to pay recompense payments as compensation for past injury or harm incurred by an employee as a result of work on the job or the company's negligence. In the case of a legal matter, an individual or entity may be required to make recompense payments as compensation for past damages or losses incurred through the course of a series of events or tasks under judgment in a legal proceeding. Recompense payments award a targeted person, group or entity with some form of monetary benefit as a result of previous actions performed or occurrences of legal loss. Terms of legal recompense payments are typically outlined and awarded based on the court’s legal view of just and adequate compensation for loss or damages.

Recompense

Reimbursable out-of-pocket costs are cash payments made to an employee by a company when that employee pays for work-related expenses out-of-pocket.

Reimbursable out-of-pocket costs are things that an employee pays for upfront and then are paid back for by their company. Most companies have guidelines to help employees determine what expenses are considered reimbursable out-of-pocket costs and not. In the health insurance industry, out-of-pocket expenses refer to the portion of the bill that the insurance company doesn't cover and that the individual must pay on their own. Reimbursable out-of-pocket costs occur when you pay for something with your own money and they are paid back for those expenses. When a company reimburses employees, it can deduct all costs as business expenses without impacting an individual’s taxes.

Reimbursable Out-Of-Pocket Costs

A generic term for several types of plans that reimburse employees for work-related expenses, such as medical, auto, travel, meal, and entertainment costs.

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Publication 463 (2019), Travel, Gift, and Car Expenses

A generic term for several types of plans that reimburse employees for various types of work-related expenses. A breakdown of some common examples of workplace expenses that would require employer reimbursement include the following:
**Transportation:** The cost of any work-related travel, including vehicle expenditures, meals, lodging, and any entertainment expenses that meet the criteria detailed in IRS Publication 463, Travel, Entertainment, Gift, and Car Expenses. Certain states like California require employers to reimburse employees’ reasonable work-related expenses, and any expense reimbursements received do not have to be reported as wages or income. Reimbursement plans are instituted by employers in order to allow them to pay for a more accurate amount of employee expenses incurred, instead of having to provide a broad allowance or increase in compensation to cover them. But in order for this to happen, employers must pre-establish a written accountable plan, and the employees submit properly documented expenses under that plan.

Reimbursement Plan

Remuneration is an employee's total compensation, including base salary, bonuses, expense account reimbursements, and other financial benefits.

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Table of Contents
What Is Remuneration?
Understanding Remuneration
Special Considerations
Remuneration FAQs Some companies pride themselves on their generous employee remuneration and may offer bonuses, employee stock options, and 401(k) plan matching contributions. It includes not only base salary but any bonuses, commission payments, overtime pay, or other financial benefits that an employee receives from an employer. Remuneration includes not only base salary but all other forms of financial compensation an employee receives. At the executive level, remuneration may include a combination of salary, stock shares, bonuses, and other financial compensation.

Salaries and Compensation

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