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Executive Compensation
Executive compensation is composed of both the Salary, financial compensation (executive pay) and other non-financial benefits received by an executive from their employing firm in return for their service. It is typically a mixture of fixed salary, variable performance-based bonuses (cash, shares, or Call option, call options on the company stock) and Employee benefits, benefits and other perquisites all ideally configured to take into account government regulations, tax law, the desires of the organization and the executive. The three decades from the 1980s saw a dramatic rise in executive pay relative to that of an average worker's wage in the United States, and to a lesser extent in a number of other countries. Observers differ as to whether this rise is a natural and beneficial result of competition for scarce business talent that can add greatly to stockholder value in large companies, or a socially harmful phenomenon brought about by social and political changes that have giv ...
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Salary
A salary is a form of periodic payment from an employer to an employee, which may be specified in an employment contract An employment contract or contract of employment is a kind of contract A contract is a legally binding agreement that defines and governs the rights and duties between or among its parties Image:'Hip, Hip, Hurrah! Artist Festival at Skagen', .... It is contrasted with piece wage A wage is the distribution from an employer of a ''security'' (expected return or profits derived solely from others) paid to an employee. Like interest is paid out to an investor on his investments, a wage is paid (from company earnings) to t ...s, where each job, hour or other unit is paid separately, rather than on a periodic basis. From the point of view of running a business, salary can also be viewed as the cost of acquiring and retaining human resources for running operations, and is then termed personnel expense or salary expense. In accounting, salaries are recorded ...
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Employee Retention
Employee retention refers to the ability of an organization to retain its employee Employment is the relationship between two parties Image:'Hip, Hip, Hurrah! Artist Festival at Skagen', by Peder Severin Krøyer (1888) Demisted with DXO PhotoLab Clearview; cropped away black border edge.jpg, 300px, ''Hip, Hip, Hurrah!'' ...s. Employee retention can be represented by a simple statistic (for example, a retention rate of 80% usually indicates that an organization kept 80% of its employees in a given period). However, many consider employee retention as relating to the efforts by which employers attempt to retain the employees in their workforce. In this sense, retention becomes the strategies rather than the outcome. A distinction should be drawn between low-performing employees and top performers, and efforts to retain employees should be targeted at valuable, contributing employees. Employee turnover is a symptom of deeper issues that have not been resolved, which may incl ...
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Options Backdating
Option or Options may refer to: Computing *Option key #REDIRECT Option key #REDIRECT Option key#REDIRECT Option key The Option key is a modifier key present on Apple keyboards. It is located between the Control key A Control key (marked "Ctrl") on a Windows keyboard next to one style of a Windows ..., a key on Apple computer keyboards *Option type In programming language A programming language is a formal language In logic, mathematics, computer science, and linguistics, a formal language consists of string (computer science), words whose symbol (formal), letters are taken from an ..., a polymorphic data type in programming languages *Command-line option A command-line interface (CLI) processes command COMMAND.COM is the default command-line interpreter A command-line interface (CLI) processes commands to a computer program in the form of lines of text. The program which handles the i ..., an optional parameter to a command *OPTIONS, an HTTP requ ...
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Income Statement
An income statement or profit and loss accountProfessional English in Use - Finance, Cambridge University Press, p. 10 (also referred to as a ''profit and loss statement'' (P&L), ''statement of profit or loss'', ''revenue statement'', ''statement of financial performance'', ''earnings statement'', ''statement of earnings'', ''operating statement'', or ''statement of operations'') is one of the financial statement Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form which is easy to un ...s of a company and shows the company's revenue In accounting, revenue is the total amount of income generated by the sale of goods and services related to the primary operations of the business. Commercial revenue may also be referred to as sales or as turnover. Some companies receive reven ...s and expenseExpenditure ...
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Option (finance)
In finance Finance is the study of financial institutions, financial markets and how they operate within the financial system. It is concerned with the creation and management of money and investments. Savers and investors have money available which could ..., an option is a contract which conveys to its owner, the ''holder'', the right, but not the obligation, to buy or sell an underlying In finance, the underlying of a derivative In mathematics Mathematics (from Ancient Greek, Greek: ) includes the study of such topics as quantity (number theory), mathematical structure, structure (algebra), space (geometry), and calculu ... asset In financial accounting Financial accounting is the field of accounting Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entity, economic entities such a ... or instrument Instrument may refer to: Science and technology * Flight instrum ...
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Vesting Schedule
In law, vesting is the point in time when the rights and interests arising from legal ownership of a property is acquired by some person. Vesting creates an immediately secured right of present or future deployment. One has a vested right to an asset that cannot be taken away by any third party, even though one may not yet possess the asset. When the right, interest, or title to the present or future possession of a legal estate can be transferred to any other party, it is termed a vested interest. The concept can arise in any number of contexts, but the most common are inheritance law and retirement plan law. In real estate, to vest is to create an entitlement to a privilege or a right. For example, one may cross someone else's property regularly and unrestrictedly for several years, and one's right to an easement becomes vested. The original owner still retains the possession, but can no longer prevent the other party from crossing. Inheritance Some bequests do not vest immedi ...
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Capital Gain
Capital gain is an economic concept defined as the profit Profit may refer to: Business and law * Profit (accounting) Profit, in accounting Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entity, economic en ... earned on the sale of an asset In financial accounting Financial accounting is the field of accounting Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entity, economic entities such a ... which has increased in value over the holding period. An asset may include tangible property In law, tangible property is literally anything that Tangibility, can be touched, and includes both real property and personal property (or moveable property), and stands in distinction to intangible property. In English law and some Commonwealt ..., a car, a business, or intangible property Intang ...
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Strike Price
In finance Finance is a term for the management, creation, and study of money In a 1786 James Gillray caricature, the plentiful money bags handed to King George III are contrasted with the beggar whose legs and arms were amputated, in the left corn ..., the strike price (or exercise price) of an option Option or Options may refer to: Computing *Option key, a key on Apple computer keyboards *Option type, a polymorphic data type in programming languages *Command-line option, an optional parameter to a command *OPTIONS, an Hypertext Transfer Prot ... is a fixed price at which the owner of the option can buy (in the case of a call Call or Calls may refer to: Arts, entertainment, and media Games * Call, a type of betting in poker * Call, in the game of contract bridge, a bid, pass, double, or redouble in the bidding stage Music and dance * Call (band), from Lahore, Pakis ...), or sell (in the case of a put), the underlying security Security is freedom from, or res ...
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Vesting Period
In law, vesting is the point in time when the rights and interests arising from legal ownership of a property is acquired by some person. Vesting creates an immediately secured right of present or future deployment. One has a vested right to an asset that cannot be taken away by any third party, even though one may not yet possess the asset. When the right, interest, or title to the present or future possession of a legal estate can be transferred to any other party, it is termed a vested interest. The concept can arise in any number of contexts, but the most common are inheritance law and retirement plan law. In real estate, to vest is to create an entitlement to a privilege or a right. For example, one may cross someone else's property regularly and unrestrictedly for several years, and one's right to an easement becomes vested. The original owner still retains the possession, but can no longer prevent the other party from crossing. Inheritance Some bequests do not vest immedi ...
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Total Shareholder Return
Total shareholder return (TSR) (or simply total return) is a Measurement, measure of the performance of different companies' stocks and shares over time. It combines share price appreciation and dividends paid to show the total return to the shareholder expressed as an annualized percentage. It is calculated by the growth in capital from purchasing a share in the company assuming that the dividends are reinvested each time they are paid. This growth is expressed as a percentage as the compound annual growth rate. The main benefit of TSR is that it allows the performance of shares to be compared even though some of the shares may have a high growth and low dividends and others may have low growth and high dividends. Most Stock market index, stock market indices only use the growth of the prices of the companies making up the index. However, when they use TSR for the companies it is called a total return index or accumulation index. For example, corresponding to the S&P 500 index cal ...
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Return On Equity
The return on equity (ROE) is a measure of the profitability of a business in relation to the equity Equity may refer to: Finance, accounting and ownership *Equity (finance), ownership of assets that have liabilities attached to them ** Stock, equity based on original contributions of cash or other value to a business ** Home equity, the differe .... Because shareholder's equity can be calculated by taking all assets and subtracting all liabilities, ROE can also be thought of as a return on ''assets minus liabilities''. ROE measures how many dollars of profit are generated for each dollar of shareholder's equity. ROE is a metric of how well the company utilizes its equity to generate profits. The formula :ROE=\frac ROE is equal to a fiscal year A fiscal year (or financial year, or sometimes budget year) is used in government accounting, which varies between countries, and for budget purposes. It is also used for financial report Financial statements (or financial reports ...
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Earnings Per Share
Earnings per share (EPS) is the monetary value of earnings Earnings are the net benefits of a corporation A corporation is an organization—usually a group of people or a company—authorized by the State (polity), state to act as a single entity (a legal entity recognized by private and public law ... per outstanding share of common stock Common stock is a form of corporate equity Equity may refer to: Finance, accounting and ownership *Equity (finance), ownership of assets that have liabilities attached to them ** Stock, equity based on original contributions of cash or other v ... for a company. In the United States, the Financial Accounting Standards Board The Financial Accounting Standards Board (FASB) is a private standard-setting body whose primary purpose is to establish and improve Generally Accepted Accounting Principles (GAAP) within the United States in the public's interest. The Securi ... (FASB) requires EPS information for the four major catego ...
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