Page 690 - Bruce Ellig - The Complete Guide to Executive Compensation (2007)

Glossary 675

deferred taxes Tax obligation on earned income deferred until when payment is paid.
deficit Money paid out exceeds money received.
defined-benefit pension plan A company pension plan whose employees will receive a known
amount based on their years of service, earnings during those years, and age at time of retirement. An
actuary determines the amount of money the company must set aside each year to provide the benefit.
The company gets a tax deduction at time of contribution, but the individual is taxed only when the
amount is received.
defined-contribution pension plan A company pension plan in which the amount of contribution
made each year (by the company and/or individual) is known. What is unknown is the payout at time
of retirement. This will be a function of the amount set aside and the investment results of those con-
tributions. Individuals make their contribution on after-tax dollars and are taxed on any appreciation
upon payout. If the contribution is made from pre-tax dollars, see 401(k) plans.
deflation Decrease in consumer purchases, with possible drop in consumer prices; some refer to this
as disinflation.
dehired Terminated.
delayed single trigger contract See walk-away contract.
delist The removal of a company stock from those that may be bought and sold on a particular stock
exchange.
de minimus A value so small as to be inconsequential.
demotion A reduction in job responsibility.
dental insurance Reimbursement for dental expenses.
Department of Labor Executive branch of the federal government responsible for enforcing
federal statutes covering a wide range of workplace situations.
Department of the Treasury The department in the executive branch of the federal government
that includes the Internal Revenue Service as well as the Securities and Exchange Commission.
dependent Person who attains coverage and/or is taken care of by another person.
dependent life insurance Insurance on the lives of spouse and dependent children.
deposit A sum of money placed with a financial institution.
depository Organization holding securities for another and recording changes in ownership.
Depository Trust Company Company and municipal securities clearinghouse for trade settlements.
deposit share option An additional stock option granted for an owned share to be held for a speci-
fied period of time by the company.
depreciation (accelerated) Assumes the useful life of a fixed asset depreciates faster in early years.
depreciation (accumulated) The sum total of all depreciation taken for a particular asset over the
years.
depreciation (straightline) Assumes the useful life of a fixed asset depreciates at the same rate
throughout its useful life.
depression A multiyear period of unemployment, poor business results, and low consumer spending.
derivative A financial contract on the direction and amount of change in any item that can be
measured quantitatively (e.g., interest rate, bond value, stock price, or commodity). A derivative could
be used to hedge against possible adverse consequences.
derivative security Any security that may become a share of the company’s common stock. In
addition to stock options, this would include all convertible securities (e.g., convertible debentures and
convertible preferred stock).