Exam Review Comp + Benefits

Executive Compensation

The payment and benefits provided to top executives, which often include base salary, bonuses, and stock options.

Key Employee

An officer or significant owner meeting certain pay/ownership criteria set by the Internal Revenue Code (IRC).

Highly Compensated Employee (HCE)

An employee who earns above a certain threshold or is in the top 20% by pay.

Current Core Compensation

Base salary plus bonuses, including discretionary and performance-contingent incentives.

Deferred Compensation

Future-oriented payment forms such as stock options or restricted stock to encourage long-term success.

Golden Parachute

A lucrative severance package provided to executives upon their termination.

Platinum Parachute

An even more generous severance package than a golden parachute with additional benefits.

Agency Theory

The principle that executive compensation aligns executive incentives with shareholder interests through performance-based pay.

Tournament Theory

The concept that large pay gaps incentivize competition and effort among employees.

Social Comparison Theory

The theory that compensation committees benchmark executive pay against peers, potentially increasing pay.

Sarbanes-Oxley Act (SOX)

A law designed to improve financial reporting and increase accountability in corporate governance.

Dodd-Frank Act

Legislation that includes provisions for shareholder advisory votes on executive compensation.

Executive Bonuses

Annual incentives or payouts tied to performance metrics or board discretion.

Equity Plans

Compensation agreements that provide stock options or ownership stakes to enhance company performance.

Enhanced Benefits

Additional perks and benefits given to executives beyond standard employment offerings.

Contingent Workers

Non-permanent employees hired for specialized tasks or to meet short-term needs.

Part-Time Employees

Workers who typically work less than 35 hours per week, either voluntarily or involuntarily.

Flexible Work Schedules

Work arrangements like flextime, compressed workweeks, and telecommuting to improve work-life balance.

Job Sharing

An arrangement in which two part-time employees share the responsibilities of one full-time position.

Union Reactions to Contingent Workers

Labor unions often resist contingent worker arrangements due to concerns over job security and wage standards.

Expatriates

Employees working temporarily in a foreign country.

Repatriation

The process of returning expatriates to their home country after an overseas assignment.

Base Pay

The basic salary an employee receives, before additional allowances or bonuses.

Hardship Allowance

Additional compensation provided to employees facing difficult working conditions in a foreign country.

Balance Sheet Approach

A compensation method ensuring expatriates maintain their home-country standard of living while abroad.

GDP (Gross Domestic Product)

The total market value of all goods and services produced in a country over a specific period.

Purchasing Power Parity (PPP)

An economic theory that compares different countries' currencies through a market "basket of goods" approach.

Per Capita Health Expenditure

Average healthcare spending per person, indicating the level of investment in health services.

Temporary Workers

Employees hired for short-term labor to meet immediate business needs.

Leased Employees

Workers provided by leasing firms who work under the client company's direction.

Telecommuting

Work arrangement that allows employees to work remotely using technology.

Mobile Premiums

Additional compensation provided for employees relocating between different locations.

Consumer Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services.

Work-Life Balance

The equilibrium between personal life and professional obligations.

Benefits Compliance

Ensuring that employee benefit plans adhere to relevant laws, such as ERISA and FLSA.

Severance Pay

Payments made to an employee after termination from their position.

Compensation Committee

A group responsible for determining and reviewing executive compensation at a corporation.

Paid-Time-Off (PTO)

A policy that allows employees to take time away from work without losing pay.

Minimum Wage

The lowest wage mandated by law that employers can pay employees.

Collective Bargaining

The negotiation process between employers and a group of employees to determine employment conditions.

Social Security

A federal insurance program that provides benefits to retirees, disabled individuals, and survivors.

Equitable Pay Distribution

The fair allocation of compensation among employees for similar work.

Local Labor Laws

Legal guidelines governing employment, wages, and working conditions within a specific jurisdiction.