Compensation Dictionary

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 7 Compensation Terms in this directory beginning with the letter S.
SALARY GRADE STRUCTURE
An organized compensation structure that includes various pay grades with a maximum, a midpoint and a minimum pay rate for a given job.

SPOT AWARD
A type of bonus reward designed to recognize achievements, as they occur, for a specific project or task. Typically, spot awards are earned for special projects achieved over a short period of time.

STOCK APPRECIATION RIGHT
A cash-settled long-term incentive given to an employee that is equivalent to the appreciation of company stock over a specified period, so that the holder/employee benefits from an increase in stock price.

STOCK OPTION
A benefit given by a company to an employee in the form of an option to buy stock in the company at a stated fixed price or at a discount.

STOCK OWNERSHIP GUIDELINES
A method for measuring the annual usage of shares for incentive purposes.

SUMMARY COMPENSATION TABLE
The Summary Compensation Table is included in a company’s proxy statement and provides a comprehensive overview of pay levels for top-paid executive officers (typically over the last three years).

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (SERP)
A type of non-qualified deferred compensation plan for key executives that provides supplemental income to the basic retirement benefits to which the executive is otherwise entitled. SERP benefits are payable only if vesting conditions and other requirements are met by the executive and become taxable upon distribution.


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