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17 Cards in this Set
- Front
- Back
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Long-term Incentive Plans a.k.a. Capital / Equity Accumulation or Appreciation |
traditionally provided to top management to emphasize the long term performance in terms of increased share value |
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Employee Stock Options |
provide the holder of the option with the right to purchase company shares at an agreed or strike price sometimes in the future |
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Cliff |
the date when employee can begin to exercise options |
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Grant |
the number of options provided at a particular strike price |
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Vesting |
the date at which the employee can receive the monetary benefit from the options |
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Excerise |
the action of using the option ot buy the stock |
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Sell |
the selling of stock(s) |
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Term |
the expiry date of the option after which the employee can no longer exercise the option |
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Black Scholes Model |
a method used to determine the value of a stock option |
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Employee Share Purchases/ Stock Ownership Plans |
allows employees to purchase stock, normally through payroll deduction, at current market prices and without having to incur brokeage fees |
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Performance Share Plans |
bonuses are paid out in the form of company shares |
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Consideration for Variable Pay and Incentive Programs |
popular because of the perceived impact they have on motivation and because they are only paid out if acceptable profits and performance occurs must be carefully designed to ensure they do not result in employees focusing on one element of performance (e.g. short term profits) at the expense of other important performance criteria (e.g. long term quality) |
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Executive Pay Plans |
goals of the organization will directly link to the compensation of these pay plans these employees will have different triggers if the organization values market shares over profitability, or perhapes quality of production over gross margins |
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Book Value Plans |
a form of stock option plan where the purchase price of the option is based on the book value of the company. Under these schemes employees can purchase stock at an agreed book value and sell them at market value |
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Stock Appreciation Rights |
grant eligible employees an award equal to the increased market value of an assigned number of shares of the organization's stock |
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Restricted Stock |
stock that is granted to employees but has certain restriction placed upon it in terms of when and how much it can be sold for, and may also not have shareholder voting rights |
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Phantom Stock |
employees are assigned an amount of "phantom" shares in the organization at a current price. Their bonus is determined by the increased in the value of those shares as measured by the performance of actual shares |
