Compensation Dictionary
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.
There are currently 6 names in this directory beginning with the letter R.
REASONABLE COMPENSATION
That which is consistent with the normal compensation for similar employees performing similarduties for similar companies under similar circumstances.
RECOGNITION PLAN
An employer’s effort to motivate employees by recognizing their achievements (length of service,exemplary one-time achievement, etc.) in the organization through methods of rewarding theseachievements (ex. written or spoken thank you notes, cash “spot” bonuses, gift cards, etc.).
RESTRICTED STOCK
Compensation to employees in the form of company shares that cannot be issued until certainrequirements have been met, such as years of service or achievement of performance goals.
RESTRICTED STOCK UNIT
Stock that is not fully transferrable until certain restrictions/conditions have been met. Uponsatisfaction of those restrictions, the stock becomes transferrable to the person. They are oftenused as a form of employee compensation, and can be settled in actual shares or cash.
RETENTION PLAN
A plan put in place with the purpose of retaining key employees in an organization by offeringcertain incentives to reduce turnover and ensure employees are motivated to stay with thecompany long-term. A good retention plan aligns with business performance goals to allow formaximum return on investment.
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