A COMPILATION OF KEY COMPENSATION TERMS
In an effort to provide our readers with valuable resources, we have put together this dictionary of key compensation terms that will be helpful to anyone in the compensation field. Here you will find all the terms you need to know to have a good grasp on the language of compensation.
The Compensation Dictionary is also available as a PDF.
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Payments that are made to an employee at a later date after which the income was earned and,in most cases, includes a deferment of taxes on said income. Examples of deferred compensationinclude retirement plans, pensions, deferred savings and stock-option plans.
DISCRETIONARY BONUS PLAN
Extra compensation awarded solely at the employer’s discretion and is not expected by the employee. A form of variable pay in which the amount, timing, requirements, and announcement of the bonus are not disclosed ahead of time to avoid implying incentive, or that meeting certain goals will guarantee the bonus.